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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest Event
Reported): February 24, 1999
CWMBS, INC. (as depositor under the Pooling and Servicing
Agreement, dated as of February 1, 1999, providing for the
issuance of the CWMBS, INC., Residential Asset
Securitization Trust 1999-A4 Mortgage Pass-Through
Certificates, Series 1999-D).
CWMBS, INC.
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(Exact name of registrant as specified in its charter)
Delaware 333-53861 95-4449516
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(State or Other Jurisdiction (Commission (I.R.S. Employer
of Incorporation) File Number) Identification No.)
4500 Park Granada
Calabasas, California 91302
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(Address of Principal (Zip Code)
Executive Offices)
Registrant's telephone number, including area code (818) 304-5591
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<PAGE>
Item 5. Other Events.
On February 24, 1999, CWMBS, Inc. (the "Company") entered into a
Pooling and Servicing Agreement dated as of February 1, 1999 (the "Pooling and
Servicing Agreement"), by and among the Company, as depositor, IndyMac, Inc.
("IndyMac"), as seller and as master servicer, and The Bank of New York, as
trustee (the "Trustee"), providing for the issuance of the Company's Mortgage
Pass-Through Certificates, Series 1999-D (the "Certificates"). The Pooling
and Servicing Agreement is annexed hereto as Exhibit 99.1.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
Not applicable.
Not applicable.
Exhibits:
99.1. Pooling and Servicing Agreement, dated as of February 1, 1999,
by and among the Company, IndyMac and the Trustee.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
CWMBS, INC.
By: /s/ Celia Coulter
--------------------------
Vice President
Dated: November 5, 1999
<PAGE>
Exhibit Index
Exhibit Page
99.1. Pooling and Servicing Agreement, dated as of
February 1, 1999, by and among, the Company,
IndyMac and the Trustee 5
<PAGE>
EXHIBIT 99.1
EXECUTION COPY
CWMBS, INC.,
Depositor
INDYMAC, INC.,
Seller and Master Servicer
and
THE BANK OF NEW YORK,
Trustee
--------------------------------------
POOLING AND SERVICING AGREEMENT
Dated as of February 1, 1999
--------------------------------------
RESIDENTIAL ASSET SECURITIZATION TRUST 1999-A4
MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 1999-D
<PAGE>
TABLE OF CONTENTS
PAGE
ARTICLE I
DEFINITIONS
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS; REPRESENTATIONS AND WARRANTIES
Section 2.01. Conveyance of Mortgage Loans..................................1
Section 2.02. Acceptance by the Trustee of the Mortgage Loans...............4
Section 2.03. Representations, Warranties and Covenants of the Seller
and the Master Servicer.......................................5
Section 2.04. Representations and Warranties of the Depositor as to the
Mortgage Loans...............................................7
Section 2.05. Delivery of Opinion of Counsel in Connection with
Substitutions and Repurchases.................................7
Section 2.06. Execution and Delivery of Certificates........................8
Section 2.07. REMIC Matters.................................................8
ARTICLE III
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
Section 3.01. Master Servicer to Service Mortgage Loans.....................1
Section 3.02. Subservicing; Enforcement of the Obligations of Servicers.....2
Section 3.03. Successor Servicers...........................................2
Section 3.04. Liability of the Master Servicer..............................3
Section 3.05. No Contractual Relationship Between Servicers and the
Trustee.......................................................3
Section 3.06. Rights of the Depositor and the Trustee in Respect of
the Master Servicer...........................................3
Section 3.07. Trustee to Act as Master Servicer.............................3
Section 3.08. Collection of Mortgage Loan Payments; Servicing Accounts;
Collection Account; Certificate Account; Distribution
Account.......................................................4
Section 3.09. Collection of Taxes, Assessments and Similar Items;
Escrow Accounts...............................................7
Section 3.10. Access to Certain Documentation and Information
Regarding the Mortgage Loans..................................8
Section 3.11. Permitted Withdrawals from the Certificate Account,and the
Distribution Account..........................................9
Section 3.12. Maintenance of Hazard Insurance; Maintenance of Primary
Insurance Policies...........................................10
Section 3.13. Enforcement of Due-On-Sale Clauses; Assumption
Agreements...................................................11
Section 3.14. Realization Upon Defaulted Mortgage Loans;
Repurchase of Certain Mortgage Loans.........................13
Section 3.15. Trustee to Cooperate; Release of Mortgage Files..............16
Section 3.16. Documents, Records and Funds in Possession of the Master
Servicer to be Held for the Trustee..........................17
Section 3.17. Servicing Compensation.......................................17
Section 3.18. Annual Statement as to Compliance............................18
Section 3.19. Annual Independent Public Accountants' Servicing Statement;
Financial Statements.........................................18
Section 3.20. Errors and Omissions Insurance; Fidelity Bonds...............19
ARTICLE IV
DISTRIBUTIONS AND ADVANCES BY THE MASTER SERVICER
Section 4.01. Advances......................................................1
Section 4.02. Priorities of Distribution....................................1
Section 4.03. Monthly Statements to Certificateholders......................3
Section 4.04. Monthly Statements to Certificateholders......................5
Section 4.05. Determination of Pass-Through Rates for COFI Certificates.....5
Section 4.06. Determination of Pass-Through Rates for LIBOR Certificates....7
ARTICLE V
THE CERTIFICATES
Section 5.01. The Certificates..............................................1
Section 5.02. Certificate Register; Registration of Transfer and Exchange
of Certificates...............................................1
Section 5.03. Mutilated, Destroyed, Lost or Stolen Certificates.............6
Section 5.04. Persons Deemed Owners.........................................6
Section 5.05. Access to List of Certificateholders' Names and Addresses.....6
Section 5.06. Maintenance of Office or Agency...............................7
ARTICLE VI
THE DEPOSITOR AND THE MASTER SERVICER
Section 6.01. Respective Liabilities of the Depositor and the Master
Servicer......................................................1
Section 6.02. Merger or Consolidation of the Depositor or the
Master Servicer...............................................1
Section 6.03. Limitation on Liability of the Depositor, the Seller,
the Master Servicer and Others................................1
Section 6.04. Limitation on Resignation of the Master Servicer..............2
ARTICLE VII
DEFAULT
Section 7.01. Events of Default.............................................1
Section 7.02. Trustee to Act; Appointment of Successor......................2
Section 7.03. Notification to Certificateholders............................3
ARTICLE VIII
CONCERNING THE TRUSTEE
Section 8.01. Duties of the Trustee.........................................1
Section 8.02. Certain Matters Affecting the Trustee.........................2
Section 8.03. Trustee Not Liable for Certificates or Mortgage Loans.........3
Section 8.04. Trustee May Own Certificates..................................3
Section 8.05. Trustee's Fees and Expenses...................................3
Section 8.06. Eligibility Requirements for the Trustee......................4
Section 8.07. Resignation and Removal of the Trustee........................4
Section 8.08. Successor Trustee.............................................5
Section 8.09. Merger or Consolidation of the Trustee........................5
Section 8.10. Appointment of Co-Trustee or Separate Trustee.................5
Section 8.11. Tax Matters...................................................7
Section 8.12. Periodic Filings..............................................8
ARTICLE IX
TERMINATION
Section 9.01. Termination upon Liquidation or Purchase of all Mortgage
Loans.........................................................1
Section 9.02. Final Distribution on the Certificates........................1
Section 9.03. Additional Termination Requirements...........................2
ARTICLE X
MISCELLANEOUS PROVISIONS
Section 10.01. Amendment....................................................1
Section 10.02. Recordation of Agreement; Counterparts.......................2
Section 10.03. Governing Law................................................2
Section 10.04. Intention of Parties.........................................3
Section 10.05. Notices......................................................3
Section 10.06. Severability of Provisions...................................4
Section 10.07. Assignment...................................................4
Section 10.08. Limitation on Rights of Certificateholders...................4
Section 10.09. Inspection and Audit Rights..................................5
Section 10.10. Certificates Nonassessable and Fully Paid....................5
SCHEDULES
Schedule I: Mortgage Loan Schedule......................................S-I-1
Schedule II: Representations and Warranties of the Seller/Master
Servicer...................................................S-II-1
Schedule III: Representations and Warranties as to the Mortgage Loans...S-III-1
Schedule IV: [Reserved].................................................S-IV-1
EXHIBITS
Exhibit A: Form of Senior Certificate......................................A-1
Exhibit B: Form of Subordinated Certificate................................B-1
Exhibit C: Form of Residual Certificate....................................C-1
Exhibit D: [Reserved]......................................................D-1
Exhibit E: Form of Reverse of Certificates.................................E-1
Exhibit F: [Reserved]......................................................F-1
Exhibit G: Form of Initial Certification of Trustee........................G-1
Exhibit H: Form of Final Certification of Trustee..........................H-1
Exhibit I: Form of Transfer Affidavit......................................I-1
Exhibit J: Form of Transferor Certificate..................................J-1
Exhibit K: Form of Investment Letter (Non-Rule 144A).......................K-1
Exhibit L Form of Rule 144A Letter........................................L-1
Exhibit M: Form of Request for Release (for Trustee).......................M-1
Exhibit N: Form of Request for Release (Mortgage Loan Paid in Full,
Repurchased and Released).......................................N-1
Exhibit O: [Reserved]......................................................O-1
<PAGE>
THIS POOLING AND SERVICING AGREEMENT, dated as of February 1, 1999, among
CWMBS, INC., a Delaware corporation, as depositor (the "Depositor"), INDYMAC,
INC. ("IndyMac"), a Delaware corporation, as seller (in such capacity, the
"Seller") and as master servicer (in such capacity, the "Master Servicer"),
and THE BANK OF NEW YORK, a banking corporation organized under the laws of
the State of New York, as trustee (the "Trustee").
WITNESSETH THAT
In consideration of the mutual agreements herein contained, the parties
hereto agree as follows:
PRELIMINARY STATEMENT
The Depositor is the owner of the Trust Fund that is hereby conveyed to
the Trustee in return for the Certificates. The Trust Fund, for federal income
tax purposes, shall comprise three REMICs. The "latest possible maturity date"
for federal income tax purposes of all interests created hereby will be the
Latest Possible Maturity Date. The Startup Day for each REMIC described herein
shall be the Closing Date.
The following table sets forth characteristics of the Certificates,
together with the minimum denominations and integral multiples in excess
thereof in which such Classes shall be issuable (except that one Certificate
of each Class of Certificates may be issued in a different amount and, in
addition, one Residual Certificate representing the Tax Matters Person
Certificate may be issued in a different amount). Each Class of Certificates,
other than the Class R Certificates, represents ownership of regular interests
in the Master REMIC for purposes of the REMIC Provisions. The Class R
Certificate represents for purposes of the REMIC provisions ownership of the
residual interest in the Master REMIC as well as ownership of the Class T1-R
and T2-R interests (i.e., the residual interests in each Subsidiary REMIC).
<PAGE>
<TABLE>
<CAPTION>
Integral
Class Multiples
Certificate Pass-Through Minimum in Excess
Balance Rate Denomination of Minimum
<S> <C> <C> <C> <C>
Class A-1 $173,079,000.00 6. 50% $25,000 $1,000
Class A-2 $13,000,000.00 6. 50% $25,000 $1,000
Class A-3 $22,700,000.00 6. 50% $25,000 $1,000
Class R $100.00 6. 50% $100 N/A
Class M-1 $12,630,000.00 6. 50% $25,000 $1,000
Class M-2 $3,528,000.00 6. 50% $25,000 $1,000
Class M-3 $2,617,368.00 6. 50% $25,000 $1,000
Class OC (1) (1) (2) (2)
</TABLE>
(1) The Class OC Certificates will not have a principal balance and will not
accrue interest but will be entitled to distributions as provided in Section
4.02(iii).
(2) The Class OC Certificates do not have a minimum denomination amount. The
aggregate Percentage Interest of all Class OC Certificates shall equal 100%.
<PAGE>
THE TIERED REMIC STRUCTURE
Described below are the Subsidiary REMICs and the interests issued by
those REMICs. Each Subsidiary REMIC and the Master REMIC are to be REMICs
within the meaning of the REMIC Provisions. In addition, each interest
described below, other than the Class T1-R and T2-R interests in the
Subsidiary REMICs and the Class R interest in the Master REMIC, is hereby
designated as a REMIC regular interest within the meaning of the REMIC
Provisions. The Class TR-1 and Class TR-2 interests in the Subsidiary REMICs
and the Class R interest in the Master REMIC are hereby designated as the sole
class of residual interest in the Tier 1 Subsidiary REMIC, the Tier 2
Subsidiary REMIC and the Master REMIC, respectively, within the meaning of the
REMIC Provisions.
o TIER ONE SUBSIDIARY REMIC
A Subsidiary REMIC (the "Tier One REMIC") shall be created with the
following uncertificated interests:
Class Initial Balance Interest
Rate
T1-1 (1) (4)
T1-2 (2) (4)
T1-3 (3) (4)
T1-R $ 0.00 (5)
o The initial principal balance of the Class T1-1 interest shall equal
98% of the aggregate of the Cut-off Date Pool Principal Balance.
o The initial principal balance of the Class T1-2 interest shall equal
1% of the aggregate of the Cut-off Date Pool Principal Balance.
o The initial principal balance of the Class T1-3 interest shall equal
1% of the aggregate of the Cut-off Date Pool Principal Balance.
o The Class T1-1, Class T1-2 and Class T1-3 interests shall bear
interest at the weighted average of the Adjusted Net Mortgage Rates
of the Mortgage Loans. Interest on the Class T1-3 interest accrue
and will not be paid currently in an amount equal to 1% of the
increase in the Subordinated Amount for the Distribution Date over
the Subordinated Amount on the prior Distribution Date. The interest
so accrued on the Class T1-3 interest shall be paid as additional
principal to the Class T1-2 interest.
o The Class T3-R interest shall not have a principal balance and shall
not bear interest.
For any Distribution Date, Principal Remittance Amounts attributable to
the Mortgage Loans shall be allocated as follows: (a) 98% to the Class T1-1
interest until its balance is reduced to zero; (b) 2%, first to the Class T1-3
interest in an amount equal to 2% of any Subordination Reduction Amount for
such Distribution Date (excluding reductions attributable to Realized Losses)
and second, any excess equally between the Class T1-3 interest and the Class
T1-2 interest until the principal balances of those interests are reduced to
zero.
Net Prepayment Interest Shortfalls on the Mortgage Loans shall be
allocated ratably among the Class T1-1, Class T1-2 and Class T1-3 interests
according to their right to receive interest on such Distribution Date.
Realized Losses for any Distribution Date shall be allocated as follows:
(a) 98% to the Class T1-1 interest; (b) 2%, first to the Class T1-3 interest
to the extent that the principal balance of the Class T1-3 interest on such
Distribution Date exceeds 1% of the aggregate balance of the Mortgage Loans as
of the end Remittance Period related to such Distribution Date (after giving
effect to any principal payments made on such Distribution Date), and then
equally between the Class T1-2 and Class T1-3 interests until their principal
balances are reduced to zero.
The assets of the Tier One REMIC shall include all assets of the Trust
Fund other than the Class T1-1, Class T1-2, Class T1-3, Class T2-1, Class
T2-2, Class T2-3 and Class T2-4 interests.
o TIER TWO SUBSIDIARY REMIC
A Subsidiary REMIC (the "Tier Two REMIC") shall be created with the
following uncertificated interests:
Class Initial Balance Interest
Rate
T2-1 (1) (4)
T2-2 (2) (5)
T2-3 (3) (4)
T2-4 (6) (7)
T4-R 0.00 (16)
o The Class T2-1 interest shall have an initial principal balance
equal to that of the Class T1-1 interest.
o The Class T2-2 interest shall have an initial principal balance
equal to that of the Class T1-2 interest.
o The Class T2-3 interest shall have an initial principal balance
equal to that of the Class T1-3 interest.
o The Class T2-1 and Class T2-3 interests shall bear interest at the
weighted average of the Adjusted Net Mortgage Rates of the Mortgage
Loans. Interest on the Class T2-3 interest will accrue in an amount
equal to 1% of the increase in the Subordinated Amount for the
Distribution Date over the Subordinated Amount as of the prior
Distribution Date. The interest accrual on the Class T2-3 interest
will be paid as principal to the Class T2-2 interest.
o The Class T2-2 interest shall bear interest at a rate of 6.50% (the
"Class T2-2 Pass-Through Rate").
o The Class T2-4 interest shall have a notional principal balance that
at all times equals the principal balance of Class T1-2 interest.
o The Class T2-4 interest shall be entitled to interest on its
notional principal balance at a rate equal to the excess of interest
rate on the Class T1-2 interest over the Class T2-2 Pass-Through
Rate (the "Class T2-4 Pass-Through Rate").
o The Class T4-R interest shall not have a principal balance and shall
not bear interest.
For any Distribution Date, principal payments from the Class T1-1, Class
T1-2 and Class T1-3 interests (I.E., Principal Remittance Amounts attributable
to the Mortgage Loans) shall be allocated as follows: (a) 98% to the Class
T2-1 interest until its balance is reduced to zero; (b) 2%, first to the class
T2-3 interest in an amount equal to 2% of the Subordination Reduction Amount
for such Distribution Date (excluding reductions attributable to Realized
Losses), and second, any excess equally between the Class T2-3 interest and
Class T2-2 interest until the principal balances of those interests are
reduced to zero.
Net Prepayment Interest Shortfalls attributable to the Class T1-1,
Class T1-2 and Class T1-3 interests (I.E., those attributable to the Mortgage
Loans) shall be allocated ratably among the Class T2-1, Class T2-2, Class T2-3
and Class T2-4 interests according to their right to receive interest on such
Distribution Date.
Realized Losses for any Distribution Date attributable to the Mortgage
Loans shall be allocated as follows: (a) 98% to the Class T2-1 interest (b) 2%
first, to the Class T2-3 interest to the extent that the principal balance of
the Class T2-3 interest on such Distribution Date exceeds 1% of the aggregate
balance of the Mortgage Loans as of the end Remittance Period related to such
Distribution Date (after giving effect to any principal payments made on such
Distribution Date), and then equally between the Class T2-2 interest and the
Class T2-3 interest until their principal balances are reduced to zero
The assets of the Tier Two REMIC shall consist of all of the interests,
other than the T1-R interest, issued by the Tier One REMIC.
o TIER THREE MASTER REMIC
A Master REMIC (the "Tier Three REMIC") shall be created with the
following classes of interests the ownership of which shall be evidenced by
the Certificates.
Corresponding
Class Initial Balance Interest Rate Certificates
T3-A1 $173,079,000 6.50% A-1
T3-A2 $13,000,000 6.50% A-2
T3-A3 $22,700,000 6.50% A-3
T3-M1 $12,630,000 6.50% M-1
T3-M2 $3,528,000 6.50% M-2
T3-M3 $2,617,368 6.50% M-3
T3-S1 (1) OC
T3-S2 (2) (3) OC
T3-S3 (4) (5) OC
T3-R $100 6.50% R
o The Class T3-S1 interest shall have a notional balance equal to the
notional balance of the Class T2-4 interest for such Distribution
and shall be entitled to 100% of the amounts due on the Class T2-4
interest at the Class T2-4 Pass-Through Rate.
o The Class T3-S2 interest shall have a notional balance for each
Distribution Date equal to the aggregate balance of the Class T2-1
and Class T2-3 interests as of the end of the related Remittance
Period for such Distribution Date.
o The Class T3-S2 interest shall bear interest on its notional balance
at a rate equal to the difference between (a) the weighted average
of the interest rates of the Class T2-1 and Class T2-3 interests for
such Distribution Date, and (b) two times the weighted average of
the interest rates on the Class T2-2 and Class T2-3 interests for
such Distribution Date, treating the rate on Class T2-3 interest as
capped at 0.0% for this purpose.
o The Class T3-S3 interest shall have a notional balance for each
Distribution Date equal to the principal balance of the Class T2-2
interest as of the end of the related Remittance Period for such
Distribution Date.
o The Class T3-S3 interest shall bear interest on its notional balance
at a rate equal to the difference between (a) the Class T2-2
Pass-Through Rate (6.50%), and (b) two times the weighted average of
the rates of the Class T2-2 and Class T2-3 interests for such
Distribution Date, treating the rate on Class T2-3 interest as
capped at 0.0% for this purpose.
Each of the Class T3-A1, Class T3-A2, Class T3-A3, Class T3-M1, Class
T3-M2, Class T3-M3 and Class R interest shall be entitled receive on each
Distribution Date an amount from the Principal Remittance Amount equal to that
payable with respect to its corresponding Class of Certificate.
Interest shall accrue on the Class T3-S1, Class T3-S2 and Class T3-S3
interests and be paid as principal on the Class T3-A1, Class T3-A2, Class
T3-A3, Class T3-M1, Class T3-M2 and Class T3-M3 interests until the principal
balance of the Mortgage Loans exceeds the outstanding aggregate principal
balance of the Certificates by the Specified Subordinated Amount for such
Distribution Date. Interest that so accrues shall not bear interest.
To the extent that the Available Funds attributable to the Mortgage Loans
exceeds the amount required to be distributed to the Class T3-A1, Class T3-A2,
Class T3-A3, Class T3-M1, Class T3-M2 and Class T3-M3 interests, it shall be
distributed to the Class T3-S1, Class T3-S2 and Class T3-S3 interests in
proportion to the aggregate current and accrued and undistributed interest due
on the Class T3-S1, Class T3-S2 and Class T3-S3 interests for such
Distribution Date until they have received their entire interest entitlement.
The assets of the Tier Three REMIC shall consist of all of the interests,
other than the Class T2-R interest, issued by the Tier Two REMIC.
<PAGE>
Set forth below are designations of Classes of Certificates to the categories
used herein:
Accretion Directed
Certificates .......................... None.
Accrual Certificates........................ None.
Book-Entry Certificates..................... All Classes of Certificates
other than the Physical
Certificates.
COFI Certificates........................... None.
Component Certificates...................... None.
Components.................................. For purposes of calculating
distributions of principal
and/or interest, the Component
Certificates, if any, will be
comprised of multiple payment
components having the
designations, Initial
Component Balances or Notional
Amounts and Pass-Through Rates
set forth below:
Initial
Component Pass-
Notional Through
Designation Amount Rate
----------- ------ ----
N/A N/A N/A
Delay Certificates.......................... All interest-bearing Classes
of Certificates other than the
Non-Delay Certificates, if any.
ERISA-Restricted
Certificates........................... Residual Certificates and
Subordinated Certificates.
Floating Rate Certificates.................. None.
Inverse Floating Rate
Certificates........................... None.
LIBOR Certificates.......................... None.
Non-Delay Certificates...................... None.
Notional Amount Certificates................ None.
Offered Certificates........................ All Classes of Certificates
other than the Private
Certificates.
Physical Certificates....................... Class R and Class OC
Certificates.
Planned Principal Classes................... None.
Primary Planned Principal
Classes................................ None.
Principal Only Certificates................. None.
Private Certificates........................ Class OC Certificates.
Rating Agencies............................. S&P and Duff & Phelps.
Regular Certificates........................ All Classes of Certificates
other than the Class R
Certificates.
Residual Certificates....................... Class R Certificates.
Scheduled Principal Classes................. None.
Secondary Planned
Principal Classes...................... None.
Senior Certificates......................... Class A-1, Class A-2, Class A-3
and Class R Certificates.
Subordinated Certificates................... Class M-1, Class M-2, Class M-3
and Class OC Certificates.
Targeted Principal Classes.................. None.
With respect to any of the foregoing designations as to which the
corresponding reference is "None," all defined terms and provisions herein
relating solely to such designations shall be of no force or effect, and any
calculations herein incorporating references to such designations shall be
interpreted without reference to such designations and amounts. Defined terms
and provisions herein relating to statistical rating agencies not designated
above as Rating Agencies shall be of no force or effect.
<PAGE>
ARTICLE I
DEFINITIONS
Whenever used in this Agreement, the following words and phrases, unless
the context otherwise requires, shall have the following meanings:
Accretion Directed Certificates: As specified in the Preliminary
Statement.
Accrual Amount: Not applicable.
Accrual Certificates: As specified in the Preliminary Statement.
Accrual Termination Date: Not applicable.
Adjusted Mortgage Rate: As to each Mortgage Loan and at any time, the per
annum rate equal to the Mortgage Rate less the sum of the Master Servicing Fee
Rate and the related Servicing Fee Rate.
Adjusted Net Mortgage Rate: As to each Mortgage Loan, and at any time,
the per annum rate equal to the Mortgage Rate less the related Expense Rate.
Advance: The payment required to be made by the Master Servicer with
respect to any Distribution Date pursuant to Section 4.01, the amount of any
such payment being equal to the aggregate of payments of principal and
interest (net of the Master Servicing Fee and the applicable Servicing Fee and
net of any net income in the case of any REO Property) on the Mortgage Loans
that were due on the related Due Date and not received as of the close of
business on the related Determination Date, less the aggregate amount of any
such delinquent payments that the Master Servicer has determined would
constitute a Nonrecoverable Advance if advanced.
Agreement: This Pooling and Servicing Agreement and all amendments or
supplements hereto.
Amount Held for Future Distribution: As to any Distribution Date, the
aggregate amount held in the Certificate Account at the close of business on
the related Determination Date on account of (i) Principal Prepayments and
Liquidation Proceeds received in the month of such Distribution Date and (ii)
all Scheduled Payments due after the related Due Date.
Applied Realized Loss Amount: With respect to any Distribution Date, the
amount, if any, by which the aggregate Class Certificate Balance after
distributions of principal on such Distribution Date exceeds the aggregate
Stated Principal Balance of the Mortgage Loans as of the last day of the
immediately preceding Remittance Period.
Appraised Value: With respect to any Mortgage Loan, the Appraised Value
of the related Mortgaged Property shall be: (i) with respect to a Mortgage
Loan other than a Refinancing Mortgage Loan, the lesser of (a) the value of
the Mortgaged Property based upon the appraisal made at the time of the
origination of such Mortgage Loan and (b) the sales price of the Mortgaged
Property at the time of the origination of such Mortgage Loan; (ii) with
respect to a Refinancing Mortgage Loan, the value of the Mortgaged Property
based upon the appraisal made at the time of the origination of such
Refinancing Mortgage Loan.
Available Funds: As to any Distribution Date, the sum of (a) the
aggregate amount held in the Certificate Account at the close of business on
the related Determination Date net of the Amount Held for Future Distribution
and net of amounts permitted to be withdrawn from the Certificate Account
pursuant to clauses (i) - (viii), inclusive, of Section 3.11(a) and amounts
permitted to be withdrawn from the Distribution Account pursuant to clauses
(i) (iii), inclusive, of Section 3.11(b), (b) the amount of the related
Advance, (c) in connection with Defective Mortgage Loans, as applicable, the
aggregate of the Purchase Prices and Substitution Adjustment Amounts deposited
on the related Distribution Account Deposit Date and (d) any amount deposited
on the related Distribution Account Deposit Date pursuant to Section 3.12.
Bankruptcy Code: The United States Bankruptcy Reform Act of 1978, as
amended.
Basic Principal Distribution Amount: With respect to any Distribution
Date, the excess of (i) the Principal Remittance Amount for such Distribution
Date over (ii) the Excess Subordinated Amount, if any, for such Distribution
Date.
Blanket Mortgage: The mortgage or mortgages encumbering the Cooperative
Property.
Book-Entry Certificates: As specified in the Preliminary Statement.
Business Day: Any day other than (i) a Saturday or a Sunday, or (ii) a
day on which banking institutions in the City of New York, New York, or the
State of California or the city in which the Corporate Trust Office of the
Trustee is located are authorized or obligated by law or executive order to be
closed.
Certificate: Any one of the Certificates executed by the Trustee in
substantially the forms attached hereto as exhibits.
Certificate Account: The separate Eligible Account or Accounts created
and maintained by the Master Servicer pursuant to Section 3.08(e) with a
depository institution in the name of the Master Servicer for the benefit of
the Trustee on behalf of Certificateholders and designated "IndyMac, Inc. in
trust for the registered holders of CWMBS, Inc. Mortgage Pass-Through
Certificates Series 1999-D".
Certificate Balance: With respect to any Class of Certificates (other
than the Class OC Certificates) at any date, the maximum dollar amount of
principal to which the Holder thereof is then entitled hereunder, such amount
being equal to the Denomination thereof minus all distributions of principal
previously made with respect thereto and, in the case of any Subordinated
Certificates, reduced by any Applied Realized Loss Amounts applicable to such
Class of Subordinated Certificates. The Class OC Certificates have no
Certificate Balance.
Certificate Owner: With respect to a Book-Entry Certificate, the Person
who is the beneficial owner of such Book-Entry Certificate.
Certificate Register: The register maintained pursuant to Section 5.02.
Certificateholder or Holder: The person in whose name a Certificate is
registered in the Certificate Register, except that, solely for the purpose of
giving any consent pursuant to this Agreement, any Certificate registered in
the name of the Depositor or any affiliate of the Depositor shall be deemed
not to be Outstanding and the Percentage Interest evidenced thereby shall not
be taken into account in determining whether the requisite amount of
Percentage Interests necessary to effect such consent has been obtained;
provided, however, that if any such Person (including the Depositor) owns 100%
of the Percentage Interests evidenced by a Class of Certificates, such
Certificates shall be deemed to be Outstanding for purposes of any provision
hereof that requires the consent of the Holders of Certificates of a
particular Class as a condition to the taking of any action hereunder.
Class: All Certificates bearing the same class designation as set forth
in the Preliminary Statement.
Class A Principal Distribution Amount: For any Distribution Date (a)
prior to the Stepdown Date or with respect to which a Trigger Event is in
effect, 100% of the Principal Distribution Amount for such Distribution Date
and (b) on or after the Stepdown Date and as long as a Trigger Event is not in
effect, the positive difference, if any, of the excess of (x) the aggregate
Class Certificate Balance of the Class A Certificates immediately prior to
such Distribution Date over (y) the lesser of (A) 82.0% of the aggregate
Stated Principal Balances of the Mortgage Loans as of the last day of the
related Remittance Period and (B) the aggregate Stated Principal Balance of
the Mortgage Loans as of the last day of the related Remittance Period MINUS
$1,137,775.
Class A-3 Distribution Amount: For any Distribution Date, the product of
(i) a fraction, the numerator of which is the Class Certificate Balance of the
Class A-3 Certificates and the denominator of which is the aggregate Class
Certificate Balance of the Class A Certificates, in each case immediately
prior to such Distribution Date, (ii) the Class A Principal Distribution
Amount for such Distribution Date and (iii) the applicable percentage for such
Distribution Date set forth in the following table:
Distribution Date Percentage
----------------- ----------
March 1999 to February 2002..................................... 0%
March 2002 to February 2004.................................... 45%
March 2004 to February 2005.................................... 80%
March 2005 to February 2006................................... 100%
March 2006 and thereafter......................................300%
Class Certificate Balance: With respect to any Class and as to any date
of determination, the aggregate of the Certificate Balances of all
Certificates of such Class as of such date.
Class M-1 Principal Distribution Amount: With respect to any Distribution
Date on or after the Stepdown Date is 100% of the Principal Distribution
Amount if the Class Certificate Balance of each Class of the Class A
Certificates has been reduced to zero and a Trigger Event has occurred, or, if
the Class A Certificates are still outstanding, and as long as a Trigger Event
has not occurred and is continuing, the excess of (i) the sum of (A) the
aggregate Class Certificate Balance of the Class A Certificates (after taking
into account distribution of the Class A Principal Distribution Amount on such
Distribution Date), and (B) the Class Certificate Balance of the Class M-1
Certificates immediately prior to such Distribution Date over (ii) the lesser
of (A) 93.1% of the aggregate Stated Principal Balances of the Mortgage Loans
as of the last day of the related Remittance Period and (B) the Stated
Principal Balance of the Mortgage Loans as of the last day of the related
Remittance Period MINUS $1,137,775.
Class M-2 Principal Distribution Amount: With respect to any Distribution
Date on or after the Stepdown Date is 100% of the Principal Distribution
Amount if the Class Certificate Balance of the Class A and Class M-1
Certificates has been reduced to zero and a Trigger Event has occurred, or if
the Class A and the Class M-1 Certificates are still outstanding, and as long
as a Trigger Event has not occurred and is continuing, is the excess of (i)
the sum of (A) the aggregate Class Certificate Balance of the Class A
Certificates (after taking into account distribution of the Class A Principal
Distribution Amount on such Distribution Date), (B) the Class Certificate
Balance of the Class M-1 Certificates (after taking into account distribution
of the Class M-1 Principal Distribution Amount on such Distribution Date) and
(C) the Class Certificate Balance of the Class M-2 Certificates immediately
prior to such Distribution Date over (ii) the lesser of (A) 96.2% of the
aggregate Stated Principal Balances of the Mortgage Loans as of the last day
of the related Remittance Period and (B) the Stated Principal Balance of the
Mortgage Loans as of the last day of the related Remittance Period MINUS
$1,137,775.
Class M-3 Principal Distribution Amount: With respect to any Distribution
Date on or after the Stepdown Date and as long as a Trigger Event has not
occurred and is continuing, the excess of (i) the sum of (A) the Certificate
Principal Balance of the Class A Certificates (after taking into account
distribution of the Class A Principal Distribution Amount on such Distribution
Date), (B) the Class Certificate Balance of the Class M-1 Certificates (after
taking into account distribution of the Class M-1 Principal Distribution
Amount on such Distribution Date), (C) the Class Certificate Balance of the
Class M-2 Certificates (after taking into account distribution of the Class
M-2 Principal Distribution Amount for such Distribution Date), and (D) the
Class Certificate Balance of the Class M-3 Certificates immediately prior to
such Distribution Date over (ii) the lesser of (A) 98.5% of the aggregate
Stated Principal Balances of the Mortgage Loans as of the last day of the
related Remittance Period and (B) the Stated Principal Balance of the Mortgage
Loans as of the last day of the related Remittance Period MINUS $1,137,775.
Class Optimal Interest Distribution Amount: With respect to any
Distribution Date for each Class of Certificates (other than the Class OC
Certificates), the amount of interest accrued during the related Interest
Accrual Period at the applicable Pass-Through Rate on the related Class
Certificate Balance; provided that the Class Optimal Interest Distribution
Amount for each Class shall be reduced by such Class's pro rata share (based
on the Class Optimal Interest Distribution Amount otherwise payable in respect
of such Class on such Distribution Date) of net Prepayment Interest
Shortfalls.
Closing Date: February 24, 1999.
Code: The Internal Revenue Code of 1986, including any successor or
amendatory provisions.
COFI: The Monthly Weighted Average Cost of Funds Index for the Eleventh
District Savings Institutions published by the Federal Home Loan Bank of San
Francisco.
COFI Certificates: As specified in the Preliminary Statement.
Collection Account: The Eligible Account or Accounts established and
maintained by the Master Servicer in accordance with Section 3.08(c).
Component: As specified in the Preliminary Statement.
Component Balance: With respect to any Component and any Distribution
Date, the Initial Component Balance thereof on the Closing Date, less all
amounts applied in reduction of the principal balance of such Component and
Realized Losses allocated thereto on previous Distribution Dates.
Component Certificates: As specified in the Preliminary Statement.
Cooperative Corporation: The entity that holds title (fee or an
acceptable leasehold estate) to the real property and improvements
constituting the Cooperative Property and which governs the Cooperative
Property, which Cooperative Corporation must qualify as a Cooperative Housing
Corporation under Section 216 of the Code.
Component Notional Amount: Not applicable.
Cooperative Loan: Any Mortgage Loan secured by Cooperative Shares and a
Proprietary Lease.
Cooperative Property: The real property and improvements owned by the
Cooperative Corporation, including the allocation of individual dwelling units
to the holders of the Cooperative Shares of the Cooperative Corporation.
Cooperative Shares: Shares issued by a Cooperative Corporation.
Cooperative Unit: A single family dwelling located in a Cooperative
Property.
Corporate Trust Office: The designated office of the Trustee in the State
of New York at which at any particular time its corporate trust business with
respect to this Agreement shall be administered, which office at the date of
the execution of this Agreement is located at 101 Barclay Street, 12E, New
York, New York 10286 (Attn: Mortgage-Backed Securities Group, CWMBS, Inc.
Series 1999-D), facsimile no. (212) 815-4135 and which is the address to which
notices to and correspondence with the Trustee should be directed.
Cut-off Date: February 1, 1999.
Cut-off Date Pool Principal Balance: $227, 554,468.16.
Cut-off Date Principal Balance: As to any Mortgage Loan, the Stated
Principal Balance thereof as of the close of business on the Cut-off Date.
Debt Service Reduction: With respect to any Mortgage Loan, a reduction by
a court of competent jurisdiction in a proceeding under the Bankruptcy Code in
the Scheduled Payment for such Mortgage Loan which became final and
non-appealable, except such a reduction resulting from a Deficient Valuation
or any reduction that results in a permanent forgiveness of principal.
Debt Service Reduction Mortgage Loan: Any Mortgage Loan that became the
subject of a Debt Service Reduction.
Defective Mortgage Loan: Any Mortgage Loan which is required to be
repurchased pursuant to Section 2.02 or 2.03.
Deficient Valuation: With respect to any Mortgage Loan, a valuation by a
court of competent jurisdiction of the Mortgaged Property in an amount less
than the then outstanding indebtedness under the Mortgage Loan, or any
reduction in the amount of principal to be paid in connection with any
Scheduled Payment that results in a permanent forgiveness of principal, which
valuation or reduction results from an order of such court which is final and
non-appealable in a proceeding under the Bankruptcy Code.
Definitive Certificates: Any Certificate evidenced by a Physical
Certificate and any Certificate issued in lieu of a Book-Entry Certificate
pursuant to Section 5.02(e).
Delay Certificates: As specified in the Preliminary Statement.
Deleted Mortgage Loan: As defined in Section 2.03(c).
Delinquent: A Mortgage Loan is "Delinquent" if any regularly scheduled
monthly payment due thereon is not made by the close of business on the day
such monthly payment is due. A Mortgage Loan is "30 days Delinquent" if such
monthly payment has not been received by the close of business on the
corresponding day of the month immediately succeeding the month in which such
monthly payment was due. The determination of whether a Mortgage Loan is "60
days Delinquent", "90 days Delinquent", etc. shall be made in like manner.
Denomination: With respect to each Certificate, the amount set forth on
the face thereof as the "Initial Certificate Balance of this Certificate" or
the "Initial Notional Amount of this Certificate" or, if neither of the
foregoing, the Percentage Interest appearing on the face thereof.
Depositor: CWMBS, Inc., a Delaware corporation, or its successor in
interest.
Depository: The initial Depository shall be The Depository Trust Company,
the nominee of which is CEDE & Co., as the registered Holder of the Book-Entry
Certificates. The Depository shall at all times be a "clearing corporation" as
defined in Section 8-102(3) of the Uniform Commercial Code of the State of New
York.
Depository Participant: A broker, dealer, bank or other financial
institution or other Person for whom from time to time a Depository effects
book-entry transfers and pledges of securities deposited with the Depository.
Determination Date: As to any Distribution Date, the 18th day of each
month or if such 18th day is not a Business Day the next succeeding Business
Day; provided, however, that if such next succeeding Business Day is less than
two Business Days prior to the related Distribution Date, then the
Determination Date shall be the next Business Day preceding the 18th day of
such month.
Distribution Account: The separate Eligible Account created and
maintained by the Trustee pursuant to Section 3.08(f) in the name of the
Trustee for the benefit of the Certificateholders and designated "The Bank of
New York in trust for registered holders of CWMBS, Inc. Mortgage Pass-Through
Certificates, Series 1999-D". Funds in the Distribution Account shall be held
in trust for the Certificateholders for the uses and purposes set forth in
this Agreement.
Distribution Account Deposit Date: As to any Distribution Date, 12:30
p.m. Pacific time on the Business Day immediately preceding such Distribution
Date.
Distribution Date: The 25th day of each calendar month after the initial
issuance of the Certificates, or if such 25th day is not a Business Day, the
next succeeding Business Day, commencing in March 1999.
Due Date: With respect to any Distribution Date, the first day of the
month in which the related Distribution Date occurs.
Duff & Phelps: Duff & Phelps Credit Rating Co., or any successor thereto.
If Duff & Phelps is designated as a Rating Agency in the Preliminary
Statement, for purposes of Section 10.05(b) the address for notices to Duff &
Phelps shall be Duff & Phelps Credit Rating Co., 55 E. Monroe Street, 38th
Floor, Chicago, Illinois 60603, Attention: MBS Monitoring, or such other
address as Duff & Phelps may hereafter furnish to the Depositor and the Master
Servicer.
Eligible Account: Any of (i) an account or accounts maintained with a
federal or state chartered depository institution or trust company the
short-term unsecured debt obligations of which (or, in the case of a
depository institution or trust company that is the principal subsidiary of a
holding company, the debt obligations of such holding company, but only if
Moody's is not a Rating Agency) have the highest short-term ratings of each
Rating Agency at the time any amounts are held on deposit therein, or (ii) an
account or accounts in a depository institution or trust company in which such
accounts are insured by the FDIC or the SAIF (to the limits established by the
FDIC or the SAIF) and the uninsured deposits in which accounts are otherwise
secured such that, as evidenced by an Opinion of Counsel delivered to the
Trustee and to each Rating Agency, the Certificateholders have a claim with
respect to the funds in such account or a perfected first priority security
interest against any collateral (which shall be limited to Permitted
Investments) securing such funds that is superior to claims of any other
depositors or creditors of the depository institution or trust company in
which such account is maintained, or (iii) a trust account or accounts
maintained with the trust department of a federal or state chartered
depository institution or trust company, acting in its fiduciary capacity or
(iv) any other account acceptable to each Rating Agency. Eligible Accounts may
bear interest, and may include, if otherwise qualified under this definition,
accounts maintained with the Trustee.
ERISA: The Employee Retirement Income Security Act of 1974, as amended.
ERISA-Restricted Certificate: As specified in the Preliminary Statement.
Escrow Account: The Eligible Account or Accounts established and
maintained pursuant to Section 3.09(a).
Event of Default: As defined in Section 7.01.
Excess Proceeds: With respect to any Liquidated Mortgage Loan, the
amount, if any, by which the sum of any Liquidation Proceeds of such Mortgage
Loan received in the calendar month in which such Mortgage Loan became a
Liquidated Mortgage Loan, net of any amounts previously reimbursed to the
Master Servicer as Nonrecoverable Advance(s) with respect to such Mortgage
Loan pursuant to Section 3.11(a)(iii), exceeds (i) the unpaid principal
balance of such Liquidated Mortgage Loan as of the Due Date in the month in
which such Mortgage Loan became a Liquidated Mortgage Loan plus (ii) accrued
interest at the Mortgage Rate from the Due Date as to which interest was last
paid or advanced (and not reimbursed) to Certificateholders up to the Due Date
applicable to the Distribution Date immediately following the calendar month
during which such liquidation occurred.
Excess Subordinated Amount: With respect to any Distribution Date, the
excess, if any, of (a) the Subordinated Amount on such Distribution Date over
(b) the Specified Subordinated Amount for such Distribution Date.
Expense Fees: As to each Mortgage Loan, the sum of the related Servicing
Fee, Master Servicing Fee, and Trustee Fee.
Expense Rate: As to each Mortgage Loan, the sum of the related Servicing
Fee Rate, Master Servicing Fee Rate and Trustee Fee Rate.
Extra Principal Distribution Amount: As of any Distribution Date, the
lesser of (x) the Total Monthly Excess Spread for such Distribution Date and
(y) the Subordination Deficiency for such Distribution Date.
FDIC: The Federal Deposit Insurance Corporation, or any successor
thereto.
FHLMC: The Federal Home Loan Mortgage Corporation, a corporate
instrumentality of the United States created and existing under Title III of
the Emergency Home Finance Act of 1970, as amended, or any successor thereto.
FIRREA: The Financial Institutions Reform, Recovery and Enforcement Act
of 1989.
Fitch: Fitch IBCA, Inc., or any successor thereto. If Fitch is designated
as a Rating Agency in the Preliminary Statement, for purposes of Section
10.05(b) the address for notices to Fitch shall be Fitch IBCA, Inc., One State
Street Plaza, New York, New York 10004, Attention: Residential Mortgage
Surveillance Group, or such other address as Fitch may hereafter furnish to
the Depositor and the Master Servicer.
FNMA: The Federal National Mortgage Association, a federally chartered
and privately owned corporation organized and existing under the Federal
National Mortgage Association Charter Act, or any successor thereto.
Index: With respect to any Interest Accrual Period for the COFI
Certificates, the then applicable index used by the Trustee pursuant to
Section 4.05 to determine the applicable Pass-Through Rate for such Interest
Accrual Period for the COFI Certificates.
Indirect Participant: A broker, dealer, bank or other financial
institution or other Person that clears through or maintains a custodial
relationship with a Depository Participant.
Initial Component Balance: As specified in the Preliminary Statement.
Initial LIBOR Rate: Not applicable.
Insurance Policy: With respect to any Mortgage Loan included in the Trust
Fund, any insurance policy, including all riders and endorsements thereto in
effect, including any replacement policy or policies for any Insurance
Policies.
Insurance Proceeds: Proceeds paid by an insurer pursuant to any Insurance
Policy, in each case other than any amount included in such Insurance Proceeds
in respect of Insured Expenses.
Insured Expenses: Expenses covered by an Insurance Policy or any other
insurance policy with respect to the Mortgage Loans.
Interest Accrual Period: With respect to each Class of Delay
Certificates, corresponding REMIC Interests and any Distribution Date, the
calendar month prior to the month of such Distribution Date. With respect to
each Class of Non-Delay Certificates, corresponding REMIC Interest and any
Distribution Date, the one-month period commencing on the 25th day of the
month preceding the month in which such Distribution Date occurs and ending on
the 24th day of the month in which such Distribution Date occurs.
Interest Determination Date: With respect to (a) any Interest Accrual
Period for any LIBOR Certificates and (b) any Interest Accrual Period for the
COFI Certificates for which the applicable Index is LIBOR, the second Business
Day prior to the first day of such Interest Accrual Period.
Last Scheduled Distribution Date: The Distribution Date in the month
immediately following the month of the latest scheduled maturity date for any
of the Mortgage Loans.
Latest Possible Maturity Date: The Distribution Date following the third
anniversary of the scheduled maturity date of the Mortgage Loan having the
latest scheduled maturity date as of the Cut-off Date.
LIBOR: The London interbank offered rate for one-month United States
dollar deposits calculated in the manner described in Section 4.06.
LIBOR Certificates: As specified in the Preliminary Statement.
Liquidated Mortgage Loan: With respect to any Distribution Date, a
defaulted Mortgage Loan (including any REO Property) which was liquidated in
the calendar month preceding the month of such Distribution Date and as to
which the Master Servicer has certified (in accordance with this Agreement)
that it has received all amounts it expects to receive in connection with the
liquidation of such Mortgage Loan including the final disposition of an REO
Property.
Liquidation Proceeds: Amounts, including Insurance Proceeds, received in
connection with the partial or complete liquidation of defaulted Mortgage
Loans, whether through trustee's sale, foreclosure sale or otherwise or
amounts received in connection with any condemnation or partial release of a
Mortgaged Property and any other proceeds received in connection with an REO
Property, less the sum of related unreimbursed Master Servicing Fees,
Servicing Advances and Advances.
Loan-to-Value Ratio: With respect to any Mortgage Loan and as to any date
of determination, the fraction (expressed as a percentage) the numerator of
which is the principal balance of the related Mortgage Loan at such date of
determination and the denominator of which is the Appraised Value of the
related Mortgaged Property.
Lost Mortgage Note: Any Mortgage Note the original of which was
permanently lost or destroyed and has not been replaced.
Maintenance: With respect to any Cooperative Unit, the rent paid by the
Mortgagor to the Cooperative Corporation pursuant to the Proprietary Lease.
Majority in Interest: As to any Class of Regular Certificates, the
Holders of Certificates of such Class evidencing, in the aggregate, at
least 51% of the Percentage Interests evidenced by all
Certificates of such Class.
Master Servicer: IndyMac, Inc., a Delaware corporation, and its
successors and assigns, in its capacity as master servicer hereunder.
Master Servicer Advance Date: As to any Distribution Date, 12:30 p.m.
Pacific time on the Business Day immediately preceding such Distribution Date.
Master Servicing Fee: As to each Mortgage Loan and any Distribution Date,
an amount equal to one month's interest at the related Master Servicing Fee
Rate on the Stated Principal Balance of such Mortgage Loan or, in the event of
any payment of interest which accompanies a Principal Prepayment in Full,
interest at the Master Servicing Fee Rate on the Stated Principal Balance of
such Mortgage Loan for the period covered by such payment of interest, subject
to reduction as provided in Section 3.17.
Master Servicing Fee Rate: With respect to each Mortgage Loan, 0.031% per
annum.
Modified Mortgage Loan: Any Mortgage Loan which the Master Servicer has
modified pursuant to Section 3.14(c).
Monthly Statement: The statement delivered to the Certificateholders
pursuant to Section 4.04.
Moody's: Moody's Investors Service, Inc., or any successor thereto. If
Moody's is designated as a Rating Agency in the Preliminary Statement, for
purposes of Section 10.05(b) the address for notices to Moody's shall be
Moody's Investors Service, Inc., 99 Church Street, New York, New York 10007,
Attention: Residential Pass-Through Monitoring, or such other address as
Moody's may hereafter furnish to the Depositor or the Master Servicer.
Mortgage: The mortgage, deed of trust or other instrument creating a
first lien on an estate in fee simple or leasehold interest in real property
securing a Mortgage Note.
Mortgage File: The mortgage documents listed in Section 2.01 pertaining
to a particular Mortgage Loan and any additional documents delivered to the
Trustee to be added to the Mortgage File pursuant to this Agreement.
Mortgage Loans: Such of the mortgage loans transferred and assigned to
the Trustee pursuant to the provisions hereof as from time to time are held as
a part of the Trust Fund (including any REO Property), the mortgage loans so
held being identified in the Mortgage Loan Schedule, notwithstanding
foreclosure or other acquisition of title of the related Mortgaged Property.
Mortgage Loan Schedule: The list of Mortgage Loans (as from time to time
amended by the Master Servicer to reflect the addition of Substitute Mortgage
Loans and the deletion of Deleted Mortgage Loans pursuant to the provisions of
this Agreement) transferred to the Trustee as part of the Trust Fund and from
time to time subject to this Agreement, attached hereto as Schedule I, setting
forth the following information with respect to each Mortgage Loan:
(i) the loan number;
(ii) the Mortgagor's name and the street address of the Mortgaged
Property, including the zip code;
(iii) the maturity date;
(iv) the original principal balance;
(v) the Cut-off Date Principal Balance;
(vi) the first payment date of the Mortgage Loan;
(vii) the Scheduled Payment in effect as of the Cut-off Date;
(viii) the Loan-to-Value Ratio at origination;
(ix) a code indicating whether the residential dwelling at the time
of origination was represented to be owner-occupied;
(x) a code indicating whether the residential dwelling is either (a)
a detached single family dwelling, (b) a dwelling in a PUD, (c) a
condominium unit, (d) a two- to four-unit residential property, or (e) a
Cooperative Unit;
(xi) the Mortgage Rate;
(xii) the Servicing Fee Rate and the Master Servicing Fee Rate;
(xiii) the purpose for the Mortgage Loan; and
(xiv) the type of documentation program pursuant to which the
Mortgage Loan was originated.
Such schedule shall also set forth the total of the amounts described under
(v) above for all of the Mortgage Loans.
Mortgage Note: The original executed note or other evidence of
indebtedness evidencing the indebtedness of a Mortgagor under a Mortgage
Loan.
Mortgage Rate: The annual rate of interest borne by a Mortgage Note from
time to time.
Mortgaged Property: The underlying property securing a Mortgage Loan,
which, with respect to a Cooperative Loan, is the related Cooperative Shares
and Proprietary Lease.
Mortgagor: The obligor(s) on a Mortgage Note.
Net Monthly Excess Cashflow: For any Distribution Date the amount
remaining for distribution pursuant to subsection 4.02(iv) (before giving
effect to distributions pursuant to such subsection).
Net Prepayment Interest Shortfalls: As to any Distribution Date, the
amount by which the aggregate of Prepayment Interest Shortfalls during the
related Prepayment Period exceeds an amount equal to the aggregate Master
Servicing Fee for such Distribution Date before reduction of the Master
Servicing Fee in respect of such Prepayment Interest Shortfalls.
Non-Delay Certificates: As specified in the Preliminary Statement.
Nonrecoverable Advance: Any portion of an Advance or Servicer Advance
previously made or proposed to be made by the Master Servicer or the related
Servicer, as the case may be, that, in the good faith judgment of the Master
Servicer or such Servicer, will not be ultimately recoverable by the Master
Servicer from the related Mortgagor, related Liquidation Proceeds or
otherwise.
Notice of Final Distribution: The notice to be provided pursuant to
Section 9.02 to the effect that final distribution on any of the Certificates
shall be made only upon presentation and surrender thereof.
Offered Certificates: As specified in the Preliminary Statement.
Officer's Certificate: A certificate (i) signed by the Chairman of the
Board, the Vice Chairman of the Board, the President, a Managing Director, a
Vice President (however denominated), an Assistant Vice President, the
Treasurer, the Secretary, or one of the Assistant Treasurers or Assistant
Secretaries of the Depositor or the Master Servicer, or (ii) if provided for
in this Agreement, signed by a Servicing Officer, as the case may be, and
delivered to the Depositor and the Trustee, as the case may be, as required by
this Agreement.
Opinion of Counsel: A written opinion of counsel, who may be counsel for
the Depositor or the Master Servicer, including in-house counsel, reasonably
acceptable to the Trustee; provided, however, that with respect to the
interpretation or application of the REMIC Provisions, such counsel must (i)
in fact be independent of the Depositor and the Master Servicer, (ii) not have
any direct financial interest in the Depositor or the Master Servicer or in
any affiliate of either, and (iii) not be connected with the Depositor or the
Master Servicer as an officer, employee, promoter, underwriter, trustee,
partner, director or person performing similar functions.
Optional Termination: The termination of the trust created hereunder in
connection with the purchase of the Mortgage Loans pursuant to Section
9.01(a).
Original Mortgage Loan: The Mortgage Loan refinanced in connection with
the origination of a Refinancing Mortgage Loan.
OTS: The Office of Thrift Supervision.
Outside Reference Date: As to any Interest Accrual Period for the COFI
Certificates, the close of business on the tenth day thereof.
Outstanding: With respect to the Certificates as of any date of
determination, all Certificates theretofore executed and authenticated under
this Agreement except:
(i) Certificates theretofore canceled by the Trustee or delivered to the
Trustee for cancellation; and
(ii) Certificates in exchange for which or in lieu of which other
Certificates have been executed and delivered by the Trustee pursuant to this
Agreement.
Outstanding Mortgage Loan: As of any Due Date, a Mortgage Loan with a
Stated Principal Balance greater than zero which was not the subject of a
Principal Prepayment in Full prior to such Due Date and which did not become a
Liquidated Mortgage Loan prior to such Due Date.
Ownership Interest: As to any Residual Certificate, any ownership
interest in such Certificate including any interest in such Certificate as the
Holder thereof and any other interest therein, whether direct or indirect,
legal or beneficial.
Pass-Through Rate: For any interest-bearing Class of Certificates, the
per annum rate set forth or calculated in the manner described in the
Preliminary Statement.
Percentage Interest: As to any Certificate, the percentage interest
evidenced thereby in distributions required to be made on the related Class,
such percentage interest being set forth on the face thereof or equal to the
percentage obtained by dividing the Denomination of such Certificate by the
aggregate of the Denominations of all Certificates of the same Class.
Permitted Investments: At any time, any one or more of the following
obligations and securities:
(i) obligations of the United States or any agency thereof, provided
that such obligations are backed by the full faith and credit of the
United States;
(ii) general obligations of or obligations guaranteed by any state
of the United States or the District of Columbia receiving the highest
long-term debt rating of each Rating Agency, or such lower rating as will
not result in the downgrading or withdrawal of the ratings then assigned
to the Certificates by the Rating Agencies, as evidenced by a signed
writing delivered by each Rating Agency;
(iii) commercial or finance company paper which is then receiving
the highest commercial or finance company paper rating of each Rating
Agency, or such lower rating as will not result in the downgrading or
withdrawal of the ratings then assigned to the Certificates by the Rating
Agencies, as evidenced by a signed writing delivered by each Rating
Agency;
(iv) certificates of deposit, demand or time deposits, or bankers'
acceptances issued by any depository institution or trust company
incorporated under the laws of the United States or of any state thereof
and subject to supervision and examination by federal and/or state
banking authorities, provided that the commercial paper and/or long-term
unsecured debt obligations of such depository institution or trust
company (or in the case of the principal depository institution in a
holding company system, the commercial paper or long-term unsecured debt
obligations of such holding company, but only if Moody's is not a Rating
Agency) are then rated one of the two highest long-term and the highest
short-term ratings of each Rating Agency for such securities, or such
lower ratings as will not result in the downgrading or withdrawal of the
ratings then assigned to the Certificates by the Rating Agencies, as
evidenced by a signed writing delivered by each Rating Agency;
(v) demand or time deposits or certificates of deposit issued by any
bank or trust company or savings institution to the extent that such
deposits are fully insured by the FDIC;
(vi) guaranteed reinvestment agreements issued by any bank,
insurance company or other corporation acceptable to the Rating Agencies
at the time of the issuance of such agreements, as evidenced by a signed
writing delivered by each Rating Agency;
(vii) repurchase obligations with respect to any security described
in clauses (i) and (ii) above, in either case entered into with a
depository institution or trust company (acting as principal) described
in clause (iv) above;
(viii) securities (other than stripped bonds, stripped coupons or
instruments sold at a purchase price in excess of 115% of the face amount
thereof) bearing interest or sold at a discount issued by any corporation
incorporated under the laws of the United States or any state thereof
which, at the time of such investment, have one of the two highest
ratings of each Rating Agency (except if the Rating Agency is Moody's
such rating shall be the highest commercial paper rating of Moody's for
any such securities), or such lower rating as will not result in the
downgrading or withdrawal of the ratings then assigned to the
Certificates by the Rating Agencies, as evidenced by a signed writing
delivered by each Rating Agency;
(ix) units of a taxable money-market portfolio having the highest
rating assigned by each Rating Agency (except (i) if Fitch or Duff &
Phelps is a Rating Agency and has not rated the portfolio, the highest
rating assigned by Moody's and (ii) if S&P is a Rating Agency, "AAAm-G"
by S&P) and restricted to obligations issued or guaranteed by the United
States of America or entities whose obligations are backed by the full
faith and credit of the United States of America and repurchase
agreements collateralized by such obligations; and
(x) such other investments bearing interest or sold at a discount
acceptable to each Rating Agency as will not result in the downgrading or
withdrawal of the ratings then assigned to the Certificates by the Rating
Agencies, as evidenced by a signed writing delivered by each Rating
Agency;
provided that no such instrument shall be a Permitted Investment if such
instrument evidences the right to receive interest only payments with respect
to the obligations underlying such instrument.
Permitted Transferee: Any person other than (i) the United States, any
State or political subdivision thereof, or any agency or instrumentality of
any of the foregoing, (ii) a foreign government, International Organization or
any agency or instrumentality of either of the foregoing, (iii) an
organization (except certain farmers' cooperatives described in section 521 of
the Code) which is exempt from tax imposed by Chapter 1 of the Code (including
the tax imposed by section 511 of the Code on unrelated business taxable
income) on any excess inclusions (as defined in section 860E(c)(1) of the
Code) with respect to any Residual Certificate, (iv) rural electric and
telephone cooperatives described in section 1381(a)(2)(C) of the Code, (v) an
"electing large partnership" as defined in section 775 of the Code, (vi) a
Person that is not a citizen or resident of the United States, a corporation,
partnership, or other entity created or organized in or under the laws of the
United States or any political subdivision thereof, or an estate or trust
whose income from sources without the United States is includible in gross
income for federal income tax purposes regardless of its connection with the
conduct of a trade or business within the United States unless such Person has
furnished the transferor and the Trustee with a duly completed Internal
Revenue Service Form 4224, and (vii) any other Person so designated by the
Depositor based upon an Opinion of Counsel that the Transfer of an Ownership
Interest in a Residual Certificate to such Person may cause the Trust Fund to
fail to qualify as a REMIC at any time that the Certificates are outstanding.
The terms "United States," "State" and "International Organization" shall have
the meanings set forth in section 7701 of the Code or successor provisions. A
corporation will not be treated as an instrumentality of the United States or
of any State or political subdivision thereof for these purposes if all of its
activities are subject to tax and, with the exception of the Federal Home Loan
Mortgage Corporation, a majority of its board of directors is not selected by
such government unit.
Person: Any individual, corporation, partnership, joint venture,
association, limited liability company, joint-stock company, trust,
unincorporated organization or government, or any agency or political
subdivision thereof.
Physical Certificates: As specified in the Preliminary Statement.
Planned Balance: Not applicable.
Planned Principal Classes: As specified in the Preliminary Statement.
Pool Stated Principal Balance: As to any Distribution Date, the aggregate
of the Stated Principal Balances of the Mortgage Loans which were Outstanding
Mortgage Loans on the Due Date in the month preceding the month of such
Distribution Date.
Prepayment Interest Shortfall: As to any Distribution Date, Mortgage Loan
and Principal Prepayment, the amount, if any, by which one month's interest at
the related Mortgage Rate (net of the related Master Servicing Fee) on such
Principal Prepayment exceeds the amount of interest paid in connection with
such Principal Prepayment.
Prepayment Period: As to any Distribution Date, the calendar month
preceding the month of such Distribution Date.
Primary Insurance Policy: Each policy of primary mortgage guaranty
insurance or any replacement policy therefor with respect to any Mortgage
Loan.
Principal Distribution Amount: For each Distribution Date, the sum of (i)
the Basic Principal Distribution Amount for such Distribution Date and (ii)
the Extra Principal Distribution Amount for such Distribution Date.
Principal Only Certificates: As specified in the Preliminary Statement.
Principal Prepayment: Any payment of principal on a Mortgage Loan
(including the Purchase Price of any Modified Mortgage Loan purchased pursuant
to Section 3.14(c)) that is received in advance of its scheduled Due Date and
is not accompanied by an amount representing scheduled interest due on any
date or dates in any month or months subsequent to the month of prepayment.
Partial Principal Prepayments shall be applied by the Master Servicer in
accordance with the terms of the related Mortgage Note.
Principal Prepayment in Full: Any Principal Prepayment made by a
Mortgagor or made pursuant to Section 3.14(c) of the entire principal
balance of a Mortgage Loan.
Principal Remittance Amount: With respect to any Distribution Date, to
the extent of funds available therefor, the amount equal to the sum of the
following amounts (without duplication) with respect to the immediately
preceding Remittance Period: (i) each payment of principal on a Mortgage Loan
received or advanced by the Master Servicer during such Remittance Period,
(ii) all full and partial principal prepayments received during the related
Prepayment Period, (iii) the Liquidation Proceeds on the Mortgage Loans
allocable to principal actually collected by the Master Servicer during the
related Remittance Period, (iv) the portion of the purchase price with respect
to each Deleted Mortgage Loan, the repurchase obligation for which arose
during the related Remittance Period and that was repurchased prior to the
related Distribution Account Deposit Date, (v) the principal portion of any
Substitution Adjustment Amounts in connection with a substitution of a
Mortgage Loan as of such Distribution Date and (vi) the allocable portion of
the proceeds received with respect to the termination of the Trust (to the
extent such proceeds relate to principal).
Private Certificates: As specified in the Preliminary Statement.
Proprietary Lease: With respect to any Cooperative Unit, a lease or
occupancy agreement between a Cooperative Corporation and a holder of related
Cooperative Shares.
Prospectus Supplement: The Prospectus Supplement dated February 19, 1999
relating to the Offered Certificates.
PUD: Planned Unit Development.
Purchase Price: With respect to any Modified Mortgage Loan or any
Mortgage Loan required to be purchased by the Seller pursuant to Section 2.02
or 2.03 or purchased at the option of the Master Servicer pursuant to Section
3.14(b), an amount equal to the sum of (i) 100% of the unpaid principal
balance of the Mortgage Loan on the date of such purchase, and (ii) accrued
interest thereon at the applicable Mortgage Rate (or at the applicable
Adjusted Mortgage Rate if (x) the purchaser is the Master Servicer or (y) if
the purchaser is the Seller and the Seller is the Master Servicer) from the
date through which interest was last paid by the Mortgagor to the Due Date in
the month in which the Purchase Price is to be distributed to
Certificateholders; provided, however, that if such Mortgage Loan is a
Modified Mortgage Loan, the interest component of the Purchase Price shall be
computed (i) on the basis of the applicable Adjusted Mortgage Rate before
giving effect to the related modification and (ii) from the date to which
interest was last paid to the date on which such Modified Mortgage Loan is
assigned to the Master Servicer pursuant to Section 3.14(c).
Qualified Insurer: A mortgage guaranty insurance company duly qualified
as such under the laws of the state of its principal place of business and
each state having jurisdiction over such insurer in connection with the
insurance policy issued by such insurer, duly authorized and licensed in such
states to transact a mortgage guaranty insurance business in such states and
to write the insurance provided by the insurance policy issued by it, approved
as a FNMA- or FHLMC-approved mortgage insurer or having a claims paying
ability rating of at least "AA" or equivalent rating by a nationally
recognized statistical rating organization. Any replacement insurer with
respect to a Mortgage Loan must have at least as high a claims paying ability
rating as the insurer it replaces had on the Closing Date.
Rating Agency: Each of the Rating Agencies specified in the Preliminary
Statement. If either such organization or a successor is no longer in
existence, "Rating Agency" shall be such nationally recognized statistical
rating organization, or other comparable Person, as is designated by the
Depositor, notice of which designation shall be given to the Trustee.
References herein to a given rating or rating category of a Rating Agency
shall mean such rating category without giving effect to any modifiers.
Realized Loss: With respect to each Liquidated Mortgage Loan, an amount
(not less than zero or more than the Stated Principal Balance of the Mortgage
Loan) as of the date of such liquidation, equal to (i) the Stated Principal
Balance of the Liquidated Mortgage Loan as of the date of such liquidation,
plus (ii) interest at the Adjusted Net Mortgage Rate from the Due Date as to
which interest was last paid or advanced (and not reimbursed) to
Certificateholders up to the Due Date in the month in which Liquidation
Proceeds are required to be distributed on the Stated Principal Balance of
such Liquidated Mortgage Loan from time to time, minus (iii) the Liquidation
Proceeds, if any, received during the month in which such liquidation
occurred, to the extent applied as recoveries of interest at the Adjusted Net
Mortgage Rate and to principal of the Liquidated Mortgage Loan. With respect
to each Mortgage Loan which has become the subject of a Deficient Valuation,
if the principal amount due under the related Mortgage Note has been reduced,
the difference between the principal balance of the Mortgage Loan outstanding
immediately prior to such Deficient Valuation and the principal balance of the
Mortgage Loan as reduced by the Deficient Valuation. With respect to each
Mortgage Loan which has become the subject of a Debt Service Reduction and any
Distribution Date, the amount, if any, by which the principal portion of the
related Scheduled Payment has been reduced.
Recognition Agreement: With respect to any Cooperative Loan, an agreement
between the Cooperative Corporation and the originator of such Mortgage Loan
which establishes the rights of such originator in the Cooperative Property.
Record Date: With respect to any Distribution Date, the close of business
on the last Business Day of the month preceding the month in which such
applicable Distribution Date occurs.
Reference Bank: As defined in Section 4.05.
Refinancing Mortgage Loan: Any Mortgage Loan originated in connection
with the refinancing of an existing mortgage loan.
Relevant Mortgage Loan: As defined in Section 3.12(c).
Regular Certificates: As specified in the Preliminary Statement.
REMIC: A "real estate mortgage investment conduit" within the meaning of
section 860D of the Code.
REMIC Change of Law: Any proposed, temporary or final regulation, revenue
ruling, revenue procedure or other official announcement or interpretation
relating to REMICs and the REMIC Provisions issued after the Closing Date.
REMIC Provisions: Provisions of the federal income tax law relating to
real estate mortgage investment conduits, which appear at sections 860A
through 860G of Subchapter M of Chapter 1 of the Code, and related provisions,
and regulations promulgated thereunder, as the foregoing may be in effect from
time to time as well as provisions of applicable state laws.
Remittance Period: With respect to any Distribution Date is the period
commencing on the second day of the month preceding the month in which the
Distribution Date occurs and ending on the first day of the month in which
such Distribution Date occurs.
REO Property: A Mortgaged Property acquired by the Trust Fund through
foreclosure or deed-in-lieu of foreclosure in connection with a defaulted
Mortgage Loan.
Request for Release: The Request for Release submitted by the Master
Servicer to the Trustee, substantially in the form of Exhibits M and N, as
appropriate.
Required Insurance Policy: With respect to any Mortgage Loan, any
insurance policy that is required to be maintained from time to time under
this Agreement.
Residual Certificates: As specified in the Preliminary Statement.
Responsible Officer: When used with respect to the Trustee, any Vice
President, any Assistant Vice President, the Secretary, any Assistant
Secretary, any Trust Officer or any other officer of the Trustee customarily
performing functions similar to those performed by any of the above designated
officers and also to whom, with respect to a particular matter, such matter is
referred because of such officer's knowledge of and familiarity with the
particular subject.
SAIF: The Savings Association Insurance Fund, or any successor thereto.
S&P: Standard & Poor's, a division of The McGraw-Hill Companies Inc. If
S&P is designated as a Rating Agency in the Preliminary Statement, for
purposes of Section 10.05(b) the address for notices to S&P shall be Standard
& Poor's, 26 Broadway, 15th Floor, New York, New York 10004, Attention:
Mortgage Surveillance Monitoring, or such other address as S&P may hereafter
furnish to the Depositor and the Master Servicer.
Scheduled Balances: Not applicable.
Scheduled Classes: As specified in the Preliminary Statement.
Scheduled Payment: The scheduled monthly payment on a Mortgage Loan due
on any Due Date allocable to principal and/or interest on such Mortgage Loan
which, unless otherwise specified herein, shall give effect to any related
Debt Service Reduction and any Deficient Valuation that affects the amount of
the monthly payment due on such Mortgage Loan.
Securities Act: The Securities Act of 1933, as amended.
Security Agreement: With respect to any Cooperative Loan, the agreement
between the owner of the related Cooperative Shares and the originator of the
related Mortgage Note, which defines the terms of the security interest in
such Cooperative Shares and the related Proprietary Lease.
Seller: IndyMac, Inc., a Delaware corporation, and its successors and
assigns, in its capacity as seller of the Mortgage Loans to the Depositor.
Seller/Servicer Guide: The Seller/Servicer Guide for IndyMac, Inc.'s
mortgage loan purchase and conduit servicing program and all amendments and
supplements thereto.
Senior Certificates: As specified in the Preliminary Statement.
Senior Enhancement Percentage: For any Distribution Date, the percentage
obtained by dividing (x) the sum of (i) the aggregate Class Certificate
Balances of the Subordinated Certificates (other than the Class OC
Certificates) and (ii) the Subordinated Amount (in each case after taking into
account the distributions of the Principal Distribution Amount for such
Distribution Date) by (y) the aggregate Stated Principal Balance of the
Mortgage Loans as of the last day of the related Remittance Period.
Senior Specified Enhancement Percentage: As of any date of determination,
approximately 18.0%.
Servicer: Any person with which the Master Servicer has entered into a
Servicing Agreement for the servicing of all or a portion of the Mortgage
Loans pursuant to Section 3.02.
Servicer Advance: The meaning ascribed to such term in Section 3.08(d).
Servicing Account: The separate Eligible Account or Accounts created and
maintained pursuant to Section 3.08(b).
Servicing Advances: All customary, reasonable and necessary "out of
pocket" costs and expenses incurred in the performance by the Master Servicer
of its servicing obligations, including, but not limited to, the cost of (i)
(a) the preservation, restoration and protection of a Mortgaged Property, (b)
expenses reimbursable to the Master Servicer pursuant to Section 3.14 and any
enforcement or judicial proceedings, including foreclosures, (c) the
management and liquidation of any REO Property and (d) compliance with the
obligations under Section 3.12; and (ii) reasonable compensation to the Master
Servicer or its affiliates for acting as broker in connection with the sale of
foreclosed Mortgaged Properties and for performing certain default management
and other similar services (including, but not limited to, appraisal services)
in connection with the servicing of defaulted Mortgage Loans; provided,
however, that for purposes of this clause (ii), only costs and expenses
incurred in connection with the performance of activities generally considered
to be outside the scope of customary servicing or master servicing duties
shall be treated as Servicing Advances.
Servicing Agreement: The Seller/Servicer Contract as contemplated by the
Seller/Servicer Guide between the Master Servicer and any Servicer relating to
servicing and/or administration of certain Mortgage Loans as provided in
Section 3.02.
Servicing Fee: As to each Mortgage Loan and any Distribution Date, an
amount equal to one month's interest at the applicable Servicing Fee Rate on
the Stated Principal Balance of such Mortgage Loan.
Servicing Fee Rate: With respect to any Mortgage Loan, the per annum rate
set forth in the Mortgage Loan Schedule for such Mortgage Loan.
Servicing Officer: Any officer of the Master Servicer involved in, or
responsible for, the administration and servicing of the Mortgage Loans whose
name and facsimile signature appear on a list of servicing officers furnished
to the Trustee by the Master Servicer on the Closing Date pursuant to this
Agreement, as such list may from time to time be amended.
Servicing Standard: That degree of skill and care exercised by the Master
Servicer with respect to mortgage loans comparable to the Mortgage Loans
serviced by the Master Servicer for itself or others.
Specified Subordinated Amount: Prior to the Stepdown Date, an amount
equal to 0.75% of the Cut-off Date Principal Balance of the Mortgage Loans,
and on or after the Stepdown Date, an amount equal to 1.50% of the aggregate
Stated Principal Balance of the Mortgage Loans as of the last day of the
related Remittance Period, subject to a minimum amount equal to approximately
0.50% of the aggregate Stated Principal Balance of the Mortgage Loans as of
the Cut-off Date, provided, however, that if, on any Distribution Date, a
Trigger Event has occurred, the Specified Subordinated Amount shall not be
reduced to the applicable percentage of the then current aggregate Stated
Principal Balance of the Mortgage Loans until the Distribution Date on which a
Trigger Event is no longer occurring.
Startup Day: The Closing Date.
Stated Principal Balance: As to any Mortgage Loan and Due Date, the
unpaid principal balance of such Mortgage Loan as of such Due Date as
specified in the amortization schedule at the time relating thereto (before
any adjustment to such amortization schedule by reason of any moratorium or
similar waiver or grace period) after giving effect to any previous partial
Principal Prepayments and Liquidation Proceeds allocable to principal (other
than with respect to any Liquidated Mortgage Loan) and to the payment of
principal due on such Due Date and irrespective of any delinquency in payment
by the related Mortgagor.
Stepdown Date: The later to occur of (i) the Distribution Date in March
2002 and (ii) the first Distribution Date on which the Senior Enhancement
Percentage (calculated for this purpose only after taking into account
distributions of principal on the Mortgage Loans on the related Remittance
Period but prior to any applications of Principal Distribution Amount to the
Certificates) is greater than or equal to the Senior Specified Enhancement
Percentage.
Subordinated Amount: As of any Distribution Date, the excess, if any, of
(a) the aggregate Stated Principal Balances of the Mortgage Loans as of the
end of the related Remittance Period over (b) the aggregate of the Class
Certificate Balances of the Offered Certificates as of such Distribution Date
(after giving effect to the payment of principal on such Certificates on such
Distribution Date).
Subordinated Certificates: As specified in the Preliminary Statement.
Subordination Deficiency: With respect to any Distribution Date, the
excess, if any, of (a) the Specified Subordinated Amount applicable to such
Distribution Date over (b) the Subordinated Amount applicable to such
Distribution Date.
Subordination Reduction Amount: With respect to any Distribution Date, an
amount equal to the lesser of (a) the related Excess Subordinated Amount and
(b) the Total Monthly Excess Spread.
Subservicer: Any Person to which the Master Servicer has contracted for
the servicing of all or a portion of the Mortgage Loans pursuant to Section
3.02.
Substitute Mortgage Loan: A Mortgage Loan substituted by the Seller for a
Deleted Mortgage Loan which must, on the date of such substitution, as
confirmed in a Request for Release, substantially in the form of Exhibit M,
(i) have a Stated Principal Balance, after deduction of the principal portion
of the Scheduled Payment due in the month of substitution, not in excess of,
and not more than 10% less than, the Stated Principal Balance of the Deleted
Mortgage Loan; (ii) be accruing interest (net of the related Servicing Fee) at
a rate no lower than and not more than 1% per annum higher than, that of the
Deleted Mortgage Loan; (iii) have a Loan-to-Value Ratio no higher than that of
the Deleted Mortgage Loan; (iv) have a remaining term to maturity no greater
than (and not more than one year less than that of) the Deleted Mortgage Loan;
(v) not be a Cooperative Loan unless the Deleted Mortgage Loan was a
Cooperative Loan and (vi) comply with each representation and warranty set
forth in Section 2.03.
Substitution Adjustment Amount: The meaning ascribed to such term
pursuant to Section 2.03.
Targeted Balance: Not applicable.
Targeted Principal Classes: As specified in the Preliminary Statement.
Tax Matters Person: The person designated as "tax matters person" in the
manner provided under Treasury regulation ss. 1.860F-4(d) and temporary
Treasury regulation ss. 301.6231(a)(7)-1T. Initially, the Tax Matters Person
shall be the Trustee.
Tax Matters Person Certificate: The Class R Certificate with a
Denomination of $0.05.
Total Monthly Excess Spread: As to any Distribution Date, an amount equal
to the excess if any, of (i) the interest collected or advanced during the
related Remittance Period over (ii) the sum of the interest payable to the
Classes of Certificates on such Distribution Date.
Transfer: Any direct or indirect transfer or sale of any Ownership
Interest in a Residual Certificate.
Trigger Event: With respect to a Distribution Date after the Stepdown
Date, exists if the quotient (expressed as a percentage) of (x) the three
month rolling average of Mortgage Loans that are 60 days or more Delinquent as
of the last day of the related Remittance Period, over (y) the Stated
Principal Balance of the Mortgage Loans, as of the last day of the related
Remittance Period, equals or exceeds one-half of the related Senior
Enhancement Percentage.
Trust Fund: The corpus of the trust created hereunder consisting of (i)
the Mortgage Loans and all interest and principal received on or with respect
thereto after the Cut-off Date, other than such amounts which were due on the
Mortgage Loans on or before the Cut-off Date; (ii) the Certificate Account and
the Distribution Account and all amounts deposited therein pursuant to the
applicable provisions of this Agreement; (iii) property that secured a
Mortgage Loan and has been acquired by foreclosure, deed-in-lieu of
foreclosure or otherwise; and (iv) all proceeds of the conversion, voluntary
or involuntary, of any of the foregoing.
Trustee: The Bank of New York and its successors and, if a successor
trustee is appointed hereunder, such successor.
Trustee Fee: As to any Distribution Date, an amount equal to one-twelfth
of the Trustee Fee Rate multiplied by the Pool Stated Principal Balance with
respect to such Distribution Date.
Trustee Fee Rate: With respect to each Mortgage Loan, the per annum rate
agreed upon in writing on or prior to the Closing Date by the ----------------
Trustee and the Depositor.
Unpaid Interest Amounts: As of any Distribution Date and any Class of
Certificates, the sum of (a) the excess of (i) the sum of the Class Optimal
Interest Distribution Amount for such Distribution Date and any portion of
such Class Optimal Interest Distribution Amount from prior Distribution Dates
remaining unpaid over (ii) the amount in respect of interest on such Class of
Certificates actually distributed on the preceding Distribution Date and (b)
30 days' interest on such excess at the applicable Pass-Through Rate (to the
extent permitted by applicable law).
Unpaid Realized Loss Amount: With respect to any Class of Subordinated
Certificates and as to any Distribution Date, is the excess of (i) Applied
Realized Loss Amounts with respect to such Class over (ii) the sum of all
distributions in reduction of such Applied Realized Loss Amounts on all
previous Distribution Dates. Any amounts distributed to a Class of
Subordinated Certificates in respect of any Unpaid Realized Loss Amount will
not be applied to reduce the Class Certificate Balance of such Class.
Voting Rights: The portion of the voting rights of all of the
Certificates which is allocated to any Certificate. As of any date of
determination, (a) 1% of all Voting Rights shall be allocated to the Class OC
Certificates, if any (such Voting Rights to be allocated among the holders of
Certificates of each such Class in accordance with their respective Percentage
Interests), and (b) the remaining Voting Rights (or 100% of the Voting Rights
if there are no Class OC Notional Amount Certificates) shall be allocated
among Holders of the remaining Classes of Certificates in proportion to the
Certificate Balances of their respective Certificates on such date.
Withdrawal Date: The 18th day of each month, or if such day is not a
Business Day, the next preceding Business Day.
<PAGE>
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
REPRESENTATIONS AND WARRANTIES
Section 2.01. Conveyance of Mortgage Loans.
(a) The Seller, concurrently with the execution and delivery hereof,
hereby sells, transfers, assigns, sets over and otherwise conveys to the
Depositor, without recourse, all the right, title and interest of the Seller
in and to the Mortgage Loans, including all interest and principal received or
receivable by the Seller on or with respect to the Mortgage Loans after the
Cut-off Date and all interest and principal payments on the Mortgage Loans
received prior to the Cut-off Date in respect of installments of interest and
principal due thereafter, but not including payments of principal and interest
due and payable on the Mortgage Loans on or before the Cut-off Date. On or
prior to the Closing Date, the Seller shall deliver to the Depositor or, at
the Depositor's direction, to the Trustee or other designee of the Depositor,
the Mortgage File for each Mortgage Loan listed in the Mortgage Loan Schedule.
Such delivery of the Mortgage Files shall be made against payment by the
Depositor of the purchase price, previously agreed to by the Seller and
Depositor, for the Mortgage Loans. With respect to any Mortgage Loan that does
not have a first payment date on or before the Due Date in the month of the
first Distribution Date, the Seller shall deposit into the Distribution
Account on the first Distribution Account Deposit Date an amount equal to one
month's interest at the related Adjusted Net Mortgage Rate on the Cut-off Date
Principal Balance of such Mortgage Loan. If the Seller shall fail to deposit
such amount by the first Distribution Account Deposit Date, the Trustee shall
deposit such amount.
(b) The Depositor, concurrently with the execution and delivery hereof,
hereby sells, transfers, assigns, sets over and otherwise conveys to the
Trustee for the benefit of the Certificateholders, without recourse, all the
right, title and interest of the Depositor in and to the Trust Fund, together
with the Depositor's right to require the Seller to cure any breach of a
representation or warranty made herein by the Seller or to repurchase or
substitute for any affected Mortgage Loan in accordance herewith.
(c) In connection with the transfer and assignment set forth in clause
(b) above, the Depositor has delivered or caused to be delivered to the
Trustee for the benefit of the Certificateholders the following documents or
instruments with respect to each Mortgage Loan so assigned:
(i) (A) the original Mortgage Note, endorsed by manual or
facsimile signature in blank in the following form: "Pay to the order
of ____________ without recourse", with all intervening endorsements
showing a complete chain of endorsement from the originator to the Person
endorsing the Mortgage Note (each such endorsement being sufficient to
transfer all right, title and interest of the party so endorsing, as
noteholder or assignee thereof, in and to that Mortgage Note); or
(B) with respect to any Lost Mortgage Note, a lost note affidavit
from the Seller stating that the original Mortgage Note was lost or
destroyed, together with a copy of such Mortgage Note;
(ii) except as provided below, the original recorded Mortgage or a copy
of such Mortgage certified by the Seller (or, in the case of a Mortgage for
which the related Mortgaged Property is located in the Commonwealth of Puerto
Rico, a copy of such Mortgage certified by the applicable notary) as being a
true and complete copy of the Mortgage;
(iii) a duly executed assignment of the Mortgage (which may be included
in a blanket assignment or assignments), together with, except as provided
below, all interim recorded assignments of such mortgage (each such
assignment, when duly and validly completed, to be in recordable form and
sufficient to effect the assignment of and transfer to the assignee thereof,
under the Mortgage to which the assignment relates); provided that, if the
related Mortgage has not been returned from the applicable public recording
office, such assignment of the Mortgage may exclude the information to be
provided by the recording office; provided, further that such assignment of
Mortgage need not be delivered in the case of a Mortgage for which the related
Mortgage Property is located in the Commonwealth of Puerto Rico.
(iv) the original or copies of each assumption, modification, written
assurance or substitution agreement, if any;
(v) except as provided below, the original or duplicate original lender's
title policy and all riders thereto; and
(vi) in the case of a Cooperative Loan, the originals of the following
documents or instruments:
(A) The Cooperative Shares, together with a stock power in
blank;
(B) The executed Security Agreement;
(C) The executed Proprietary Lease;
(D) The executed Recognition Agreement;
(E) The executed assignment of Recognition Agreement;
(F) The executed UCC-1 financing statement with evidence of
recording thereon which have been filed in all places required to perfect the
Seller's interest in the Cooperative Shares and the Proprietary Lease; and
(G) Executed UCC-3 financing statements or other appropriate
UCC financing statements required by state law, evidencing a complete and
unbroken line from the mortgagee to the Trustee with evidence of recording
thereon (or in a form suitable for recordation).
In the event that in connection with any Mortgage Loan the Depositor
cannot deliver (a) the original recorded Mortgage, (b) all interim recorded
assignments or (c) the lender's title policy (together with all riders
thereto) satisfying the requirements of clause (ii), (iii) or (v) above,
respectively, concurrently with the execution and delivery hereof because such
document or documents have not been returned from the applicable public
recording office in the case of clause (ii) or (iii) above, or because the
title policy has not been delivered to either the Master Servicer or the
Depositor by the applicable title insurer in the case of clause (v) above, the
Depositor shall promptly deliver to the Trustee, in the case of clause (ii) or
(iii) above, such original Mortgage or such interim assignment, as the case
may be, with evidence of recording indicated thereon upon receipt thereof from
the public recording office, or a copy thereof, certified, if appropriate, by
the relevant recording office, but in no event shall any such delivery of the
original Mortgage Loan and each such interim assignment or a copy thereof,
certified, if appropriate, by the relevant recording office, be made later
than one year following the Closing Date, or, in the case of clause (v) above,
later than 120 days following the Closing Date; provided, however, that in the
event the Depositor is unable to deliver by such date each Mortgage and each
such interim assignment by reason of the fact that any such documents have not
been returned by the appropriate recording office, or, in the case of each
such interim assignment, because the related Mortgage has not been returned by
the appropriate recording office, the Depositor shall deliver such documents
to the Trustee as promptly as possible upon receipt thereof and, in any event,
within 720 days following the Closing Date. The Depositor shall forward or
cause to be forwarded to the Trustee (a) from time to time additional original
documents evidencing an assumption or modification of a Mortgage Loan and (b)
any other documents required to be delivered by the Depositor or the Master
Servicer to the Trustee. In the event that the original Mortgage is not
delivered and in connection with the payment in full of the related Mortgage
Loan the public recording office requires the presentation of a "lost
instruments affidavit and indemnity" or any equivalent document, because only
a copy of the Mortgage can be delivered with the instrument of satisfaction or
reconveyance, the Master Servicer shall execute and deliver or cause to be
executed and delivered such a document to the public recording office. In the
case where a public recording office retains the original recorded Mortgage or
in the case where a Mortgage is lost after recordation in a public recording
office, the Seller shall deliver to the Trustee a copy of such Mortgage
certified by such public recording office to be a true and complete copy of
the original recorded Mortgage.
As promptly as practicable subsequent to such transfer and assignment,
and in any event, within thirty (30) days thereafter, the Trustee shall (i)
affix the Trustee's name to each assignment of Mortgage, as the assignee
thereof, (ii) cause such assignment to be in proper form for recording in the
appropriate public office for real property records within thirty (30) days
after receipt thereof and (iii) cause to be delivered for recording in the
appropriate public office for real property records the assignments of the
Mortgages to the Trustee, except that, with respect to any assignment of a
Mortgage as to which the Trustee has not received the information required to
prepare such assignment in recordable form, the Trustee's obligation to do so
and to deliver the same for such recording shall be as soon as practicable
after receipt of such information and in any event within thirty (30) days
after the receipt thereof, and the Trustee need not cause to be recorded any
assignment which relates to a Mortgage Loan (a) the Mortgaged Property and
Mortgage File relating to which are located in California or (b) in any other
jurisdiction (including Puerto Rico) under the laws of which, as evidenced by
an Opinion of Counsel delivered by the Seller (at the Seller's expense) to the
Trustee, the recordation of such assignment is not necessary to protect the
Trustee's and the Certificateholders' interest in the related Mortgage Loan.
In the case of Mortgage Loans that have been prepaid in full as of the
Closing Date, the Depositor, in lieu of delivering the above documents to the
Trustee, will deposit in the Certificate Account the portion of such payment
that is required to be deposited in the Certificate Account pursuant to
Section 3.08.
(d) The Seller intends to treat the transfer of the Mortgage Loans to the
Depositor as a sale for all tax, accounting and regulatory purposes.
Section 2.02. Acceptance by the Trustee of the Mortgage Loans.
The Trustee acknowledges receipt of the documents identified in the
Initial Certification in the form annexed hereto as Exhibit G and declares
that it holds and will hold such documents and the other documents delivered
to it constituting the Mortgage Files, and that it holds or will hold such
other assets as are included in the Trust Fund, in trust for the exclusive use
and benefit of all present and future Certificateholders. The Trustee
acknowledges that it will maintain possession of the Mortgage Notes in the
State of California, unless otherwise permitted by the Rating Agencies.
The Trustee agrees to execute and deliver on the Closing Date to the
Depositor, the Master Servicer and the Seller an Initial Certification in the
form annexed hereto as Exhibit G. Based on its review and examination, and
only as to the documents identified in such Initial Certification, the Trustee
acknowledges that such documents appear regular on their face and relate to
such Mortgage Loan. The Trustee shall be under no duty or obligation to
inspect, review or examine said documents, instruments, certificates or other
papers to determine that the same are genuine, enforceable or appropriate for
the represented purpose or that they have actually been recorded in the real
estate records or that they are other than what they purport to be on their
face.
Not later than 90 days after the Closing Date, the Trustee shall deliver
to the Depositor, the Master Servicer and the Seller a Final Certification in
the form annexed hereto as Exhibit H, with any applicable exceptions noted
thereon.
If, in the course of such review, the Trustee finds any document
constituting a part of a Mortgage File which does not meet the requirements of
Section 2.01, the Trustee shall list such as an exception in the Final
Certification; provided, however, that the Trustee shall not make any
determination as to whether (i) any endorsement is sufficient to transfer all
right, title and interest of the party so endorsing, as noteholder or assignee
thereof, in and to that Mortgage Note or (ii) any assignment is in recordable
form or is sufficient to effect the assignment of and transfer to the assignee
thereof under the mortgage to which the assignment relates. The Seller shall
promptly correct or cure such defect within 90 days from the date it was so
notified of such defect and, if the Seller does not correct or cure such
defect within such period, the Seller shall either (a) substitute for the
related Mortgage Loan a Substitute Mortgage Loan, which substitution shall be
accomplished in the manner and subject to the conditions set forth in Section
2.03, or (b) purchase such Mortgage Loan from the Trustee within 90 days from
the date the Seller was notified of such defect in writing at the Purchase
Price of such Mortgage Loan; provided, however, that in no event shall such
substitution or purchase occur more than 540 days from the Closing Date,
except that if the substitution or purchase of a Mortgage Loan pursuant to
this provision is required by reason of a delay in delivery of any documents
by the appropriate recording office, and there is a dispute between either the
Master Servicer or the Seller and the Trustee over the location or status of
the recorded document, then such substitution or purchase shall occur within
720 days from the Closing Date. The Trustee shall deliver written notice to
each Rating Agency within 270 days from the Closing Date indicating each
Mortgage Loan (a) which has not been returned by the appropriate recording
office or (b) as to which there is a dispute as to location or status of such
Mortgage Loan. Such notice shall be delivered every 90 days thereafter until
the related Mortgage Loan is returned to the Trustee. Any such substitution
pursuant to (a) above or purchase pursuant to (b) above shall not be effected
prior to the delivery to the Trustee of the Opinion of Counsel required by
Section 2.05, if any, and any substitution pursuant to (a) above shall not be
effected prior to the additional delivery to the Trustee of a Request for
Release substantially in the form of Exhibit N. No substitution is permitted
to be made in any calendar month after the Determination Date for such month.
The Purchase Price for any such Mortgage Loan shall be deposited by the Seller
in the Certificate Account on or prior to the Distribution Account Deposit
Date for the Distribution Date in the month following the month of repurchase
and, upon receipt of such deposit and certification with respect thereto in
the form of Exhibit N hereto, the Trustee shall release the related Mortgage
File to the Seller and shall execute and deliver at the Seller's request such
instruments of transfer or assignment prepared by the Seller, in each case
without recourse, as shall be necessary to vest in the Seller, or a designee,
the Trustee's interest in any Mortgage Loan released pursuant hereto.
The Trustee shall retain possession and custody of each Mortgage File in
accordance with and subject to the terms and conditions set forth herein. The
Master Servicer shall promptly deliver to the Trustee, upon the execution or
receipt thereof, the originals of such other documents or instruments
constituting the Mortgage File as come into the possession of the Master
Servicer from time to time.
It is understood and agreed that the obligation of the Seller to
substitute for or to purchase any Mortgage Loan which does not meet the
requirements of Section 2.01 shall constitute the sole remedy respecting such
defect available to the Trustee, the Depositor and any Certificateholder
against the Seller.
Section 2.03. Representations, Warranties and Covenants of the Seller and
the Master Servicer.
(a) IndyMac, in its capacities as Seller and Master Servicer, hereby
makes the representations and warranties set forth in Schedule II hereto, and
by this reference incorporated herein, to the Depositor and the Trustee, as of
the Closing Date, or if so specified therein, as of the Cut-off Date.
(b) The Seller, in its capacity as Seller, hereby makes the
representations and warranties set forth in Schedule III hereto, and by this
reference incorporated herein, to the Depositor and the Trustee, as of the
Closing Date, or if so specified therein, as of the Cut-off Date.
(c) Upon discovery by any of the parties hereto of a breach of a
representation or warranty made pursuant to Section 2.03(b) that materially
and adversely affects the interests of the Certificateholders in any Mortgage
Loan, the party discovering such breach shall give prompt notice thereof to
the other parties. The Seller hereby covenants that within 90 days of the
earlier of its discovery or its receipt of written notice from any party of a
breach of any representation or warranty made pursuant to Section 2.03(b)
which materially and adversely affects the interests of the Certificateholders
in any Mortgage Loan, it shall cure such breach in all material respects, and
if such breach is not so cured, shall, (i) if such 90 day period expires prior
to the second anniversary of the Closing Date, remove such Mortgage Loan (a
"Deleted Mortgage Loan") from the Trust Fund and substitute in its place a
Substitute Mortgage Loan, in the manner and subject to the conditions set
forth in this Section 2.03; or (ii) repurchase the affected Mortgage Loan or
Mortgage Loans from the Trustee at the Purchase Price in the manner set forth
below; provided, however, that any such substitution pursuant to (i) above
shall not be effected prior to the delivery to the Trustee of the Opinion of
Counsel required by Section 2.05, if any, and a Request for Release
substantially in the form of Exhibit N, and the Mortgage File for any such
Substitute Mortgage Loan; and provided, further, that, anything to the
contrary herein notwithstanding, Seller shall have no obligation to cure any
such breach or to repurchase or substitute for such affected Mortgage Loan if
the substance of such breach constitutes fraud in the origination of such
affected Mortgage Loan and the Seller, at the time of such origination and on
the Closing Date, did not have actual knowledge of such fraud. The Seller
shall promptly reimburse the Master Servicer and the Trustee for any expenses
reasonably incurred by the Master Servicer or the Trustee in respect of
enforcing the remedies for such breach.
With respect to any Substitute Mortgage Loan or Loans, the Seller shall
deliver to the Trustee for the benefit of the Certificateholders the Mortgage
Note, the Mortgage, the related assignment of the Mortgage, and such other
documents and agreements as are required by Section 2.01, with the Mortgage
Note endorsed and the Mortgage assigned as required by Section 2.01. No
substitution is permitted to be made in any calendar month after the
Determination Date for such month. Scheduled Payments due with respect to
Substitute Mortgage Loans in the month of substitution shall not be part of
the Trust Fund and will be retained by the Seller on the next succeeding
Distribution Date. For the month of substitution, distributions to
Certificateholders will include the monthly payment due on any Deleted
Mortgage Loan for such month and thereafter the Seller shall be entitled to
retain all amounts received in respect of such Deleted Mortgage Loan.
The Master Servicer shall amend the Mortgage Loan Schedule for the
benefit of the Certificateholders to reflect the removal of such Deleted
Mortgage Loan and the substitution of the Substitute Mortgage Loan or Loans
and the Master Servicer shall deliver the amended Mortgage Loan Schedule to
the Trustee. Upon such substitution, the Substitute Mortgage Loan or Loans
shall be subject to the terms of this Agreement in all respects, and the
Seller shall be deemed to have made with respect to such Substitute Mortgage
Loan or Loans, as of the date of substitution, the representations and
warranties made pursuant to Section 2.03(b) with respect to such Mortgage
Loan. Upon any such substitution and the deposit to the Certificate Account of
the amount required to be deposited therein in connection with such
substitution as described in the following paragraph, the Trustee shall
release the Mortgage File held for the benefit of the Certificateholders
relating to such Deleted Mortgage Loan to the Seller and shall execute and
deliver at the Seller's direction such instruments of transfer or assignment
prepared by the Seller, in each case without recourse, as shall be necessary
to vest title in the Seller, or its designee, the Trustee's interest in any
Deleted Mortgage Loan substituted for pursuant to this Section 2.03.
For any month in which the Seller substitutes one or more Substitute
Mortgage Loans for one or more Deleted Mortgage Loans, the Master Servicer
will determine the amount (if any) by which the aggregate principal balance of
all such Substitute Mortgage Loans as of the date of substitution is less than
the aggregate Stated Principal Balance of all such Deleted Mortgage Loans
(after application of the scheduled principal portion of the monthly payments
due in the month of substitution). The amount of such shortage (the
"Substitution Adjustment Amount") plus an amount equal to the aggregate of any
unreimbursed Advances and Servicer Advances with respect to such Deleted
Mortgage Loans shall be deposited into the Certificate Account by the Seller
on or before the Distribution Account Deposit Date for the Distribution Date
in the month succeeding the calendar month during which the related Mortgage
Loan became required to be purchased or replaced hereunder.
In the event that the Seller shall have repurchased a Mortgage Loan, the
Purchase Price therefor shall be deposited in the Certificate Account pursuant
to Section 3.08 on or before the Distribution Account Deposit Date for the
Distribution Date in the month following the month during which the Seller
became obligated hereunder to repurchase or replace such Mortgage Loan and
upon such deposit of the Purchase Price, the delivery of the Opinion of
Counsel required by Section 2.05 and receipt of a Request for Release in the
form of Exhibit N hereto, the Trustee shall release the related Mortgage File
held for the benefit of the Certificateholders to such Person, and the Trustee
shall execute and deliver at such Person's direction such instruments of
transfer or assignment prepared by such Person, in each case without recourse,
as shall be necessary to transfer title from the Trustee. It is understood and
agreed that the obligation under this Agreement of any Person to cure,
repurchase or replace any Mortgage Loan as to which a breach has occurred and
is continuing shall constitute the sole remedy against such Persons respecting
such breach available to Certificateholders, the Depositor or the Trustee on
their behalf.
The representations and warranties made pursuant to this Section 2.03
shall survive delivery of the respective Mortgage Files to the Trustee for the
benefit of the Certificateholders.
Section 2.04. Representations and Warranties of the Depositor as to the
Mortgage Loans.
The Depositor hereby represents and warrants to the Trustee with respect
to each Mortgage Loan as of the date hereof or such other date set forth
herein that as of the Closing Date, and following the transfer of the Mortgage
Loans to it by the Seller, the Depositor had good title to the Mortgage Loans
and the Mortgage Notes were subject to no offsets, defenses or counterclaims.
The Depositor hereby assigns, transfers and conveys to the Trustee all of
its rights with respect to the Mortgage Loans including, without limitation,
the representations and warranties of the Seller made pursuant to Section
2.03(b), together with all rights of the Depositor to require the Seller to
cure any breach thereof or to repurchase or substitute for any affected
Mortgage Loan in accordance with this Agreement.
It is understood and agreed that the representations and warranties set
forth in this Section 2.04 shall survive delivery of the Mortgage Files to the
Trustee.
Section 2.05. Delivery of Opinion of Counsel in Connection with
Substitutions and Repurchases.
(a) Notwithstanding any contrary provision of this Agreement, no
substitution pursuant to Section 2.02 or 2.03 shall be made more than 90 days
after the Closing Date unless the Seller delivers to the Trustee an Opinion of
Counsel, which Opinion of Counsel shall not be at the expense of either the
Trustee or the Trust Fund, addressed to the Trustee, to the effect that such
substitution will not (i) result in the imposition of the tax on "prohibited
transactions" on the Trust Fund or contributions after the Startup Date, as
defined in Sections 860F(a)(2) and 860G(d) of the Code, respectively or (ii)
cause the Trust Fund to fail to qualify as a REMIC at any time that any
Certificates are outstanding.
(b) Upon discovery by the Depositor, the Seller, the Master Servicer, or
the Trustee that any Mortgage Loan does not constitute a "qualified mortgage"
within the meaning of Section 860G(a)(3) of the Code, the party discovering
such fact shall promptly (and in any event within five (5) Business Days of
discovery) give written notice thereof to the other parties. In connection
therewith, the Trustee shall require the Seller, at the Seller's option, to
either (i) substitute, if the conditions in Section 2.03(c) with respect to
substitutions are satisfied, a Substitute Mortgage Loan for the affected
Mortgage Loan, or (ii) repurchase the affected Mortgage Loan within 90 days of
such discovery in the same manner as it would a Mortgage Loan for a breach of
representation or warranty made pursuant to Section 2.03. The Trustee shall
reconvey to the Seller the Mortgage Loan to be released pursuant hereto in the
same manner, and on the same terms and conditions, as it would a Mortgage Loan
repurchased for breach of a representation or warranty contained in Section
2.03.
Section 2.06. Execution and Delivery of Certificates.
The Trustee acknowledges the transfer and assignment to it of the Trust
Fund and, concurrently with such transfer and assignment, has executed and
delivered to or upon the order of the Depositor, the Certificates in
authorized denominations evidencing directly or indirectly the entire
ownership of the Trust Fund. The Trustee agrees to hold the Trust Fund and
exercise the rights referred to above for the benefit of all present and
future Holders of the Certificates and to perform the duties set forth in this
Agreement to the best of its ability, to the end that the interests of the
Holders of the Certificates may be adequately and effectively protected.
Section 2.07. REMIC Matters.
The Preliminary Statement sets forth the designations and "latest
possible maturity date" for federal income tax purposes of all interests
created hereby. The "Startup Day" for purposes of the REMIC Provisions shall
be the Closing Date. The "tax matters person" with respect to the Trust Fund
shall be the Trustee and the Trustee shall hold the Tax Matters Person
Certificate. The Trust Fund's fiscal year shall be the calendar year.
<PAGE>
ARTICLE III
ADMINISTRATION AND SERVICING
OF MORTGAGE LOANS
Section 3.01. Master Servicer to Service Mortgage Loans.
For and on behalf of the Certificateholders, the Master Servicer shall
service and administer the Mortgage Loans in accordance with the terms of this
Agreement and the Servicing Standard. In connection with such servicing and
administration, the Master Servicer shall have full power and authority,
acting alone and/or through Servicers as provided in Section 3.02, to do or
cause to be done any and all things that it may deem necessary or desirable in
connection with such servicing and administration, including but not limited
to, the power and authority, subject to the terms hereof, (i) to execute and
deliver, on behalf of the Certificateholders and the Trustee, customary
consents or waivers and other instruments and documents, (ii) to consent to
transfers of any Mortgaged Property and assumptions of the Mortgage Notes and
related Mortgages (but only in the manner provided in this Agreement), (iii)
to collect any Insurance Proceeds and other Liquidation Proceeds, and (iv) to
effectuate foreclosure or other conversion of the ownership of the Mortgaged
Property securing any Mortgage Loan. The Master Servicer shall not make or
permit any modification, waiver or amendment of any term of any Mortgage Loan
which would cause the Trust Fund to fail to qualify as a REMIC or result in
the imposition of any tax under Section 860F(a) or Section 860G(d) of the
Code. Without limiting the generality of the foregoing, the Master Servicer,
in its own name or in the name of any Servicer or the Depositor and the
Trustee, is hereby authorized and empowered by the Depositor and the Trustee,
when the Master Servicer or the Servicer, as the case may be, believes it
appropriate in its reasonable judgment, to execute and deliver, on behalf of
the Trustee, the Depositor, the Certificateholders or any of them, any and all
instruments of satisfaction or cancellation, or of partial or full release or
discharge, and all other comparable instruments, with respect to the Mortgage
Loans, and with respect to the Mortgaged Properties held for the benefit of
the Certificateholders. The Master Servicer shall prepare and deliver to the
Depositor and/or the Trustee such documents requiring execution and delivery
by either or both of them as are necessary or appropriate to enable the Master
Servicer to service and administer the Mortgage Loans to the extent that the
Master Servicer is not permitted to execute and deliver such documents
pursuant to the preceding sentence. Upon receipt of such documents, the
Depositor and/or the Trustee shall execute such documents and deliver them to
the Master Servicer.
In accordance with and to the extent of the Servicing Standard, the
Master Servicer shall advance or cause to be advanced funds as necessary for
the purpose of effecting the payment of taxes and assessments on the Mortgaged
Properties, which advances shall be reimbursable in the first instance from
related collections from the Mortgagors pursuant to Section 3.09, and further
as provided in Section 3.11. The costs incurred by the Master Servicer, if
any, in effecting the timely payments of taxes and assessments on the
Mortgaged Properties and related insurance premiums shall not, for the purpose
of calculating monthly distributions to the Certificateholders, be added to
the Stated Principal Balances of the related Mortgage Loans, notwithstanding
that the terms of such Mortgage Loans so permit.
Section 3.02. Subservicing; Enforcement of the Obligations of Servicers.
(a) The Master Servicer may arrange for the subservicing of any Mortgage
Loan by a Servicer pursuant to a Servicing Agreement; provided, however, that
such subservicing arrangement and the terms of the related subservicing
agreement must provide for the servicing of such Mortgage Loans in a manner
consistent with the servicing arrangements contemplated hereunder. Each
Servicer of a Mortgage Loan shall be entitled to receive and retain, as
provided in the related Servicing Agreement and in Section 3.17, the related
Servicing Fee from payments of interest received on such Mortgage Loan after
payment of all amounts required to be remitted to the Master Servicer in
respect of such Mortgage Loan. Unless the context otherwise requires,
references in this Agreement to actions taken or to be taken by the Master
Servicer in servicing the Mortgage Loans include actions taken or to be taken
by a Servicer on behalf of the Master Servicer. Each Servicing Agreement will
be based upon such terms and conditions as are generally required or permitted
by the Seller/Servicer Guide and are not inconsistent with this Agreement and
as the Master Servicer and the Servicer have agreed. With the approval of the
Master Servicer, a Servicer may delegate its servicing obligations to
third-party servicers, but such Servicer will remain obligated under the
related Servicing Agreement. The Master Servicer and Servicer may enter into
amendments to the related Servicing Agreement or a different form of Servicing
Agreement; provided, however, that any such amendments or different forms
shall be consistent with and not violate the provisions of either this
Agreement or the Seller/Servicer Guide in a manner which would materially and
adversely affect the interests of the Certificateholders.
(b) For purposes of this Agreement, the Master Servicer shall be deemed
to have received any collections, recoveries or payments with respect to the
Mortgage Loans that are received by a Servicer regardless of whether such
payments are remitted by the Servicer to the Master Servicer.
(c) As part of its servicing activities hereunder, the Master Servicer,
for the benefit of the Trustee and the Certificateholders, shall use its best
reasonable efforts to enforce the obligations of each Servicer under the
related Servicing Agreement, to the extent that the non-performance of any
such obligation would have material and adverse effect on a Mortgage Loan.
Such enforcement, including, without limitation, the legal prosecution of
claims, termination of Servicing Agreements and the pursuit of other
appropriate remedies, shall be in such form and carried out to such an extent
and at such time as the Master Servicer, in its good faith business judgment,
would require were it the owner of the related Mortgage Loans. The Master
Servicer shall pay the costs of such enforcement at its own expense, and shall
be reimbursed therefor only (i) from a general recovery resulting from such
enforcement to the extent, if any, that such recovery exceeds all amounts due
in respect of the related Mortgage Loan or (ii) from a specific recovery of
costs, expenses or attorneys fees against the party against whom such
enforcement is directed.
Section 3.03. Successor Servicers.
The Master Servicer shall be entitled to terminate any Servicing
Agreement that may exist in accordance with the terms and conditions of such
Servicing Agreement and without any limitation by virtue of this Agreement;
provided, however, that in the event of termination of any Servicing Agreement
by the Master Servicer or the Servicer, the Master Servicer shall either act
as servicer of the related Mortgage Loan or enter into a Servicing Agreement
with a successor Servicer which will be bound by the terms of the related
Servicing Agreement. If the Master Servicer or any affiliate of the Master
Servicer acts as servicer, it will not assume liability for the
representations and warranties of the Servicer which it replaces. If the
Master Servicer enters into a Servicing Agreement with a successor Servicer,
the Master Servicer shall use reasonable efforts to have the successor
Servicer assume liability for the representations and warranties made by the
terminated Servicer in respect of the related Mortgage Loans and, in the event
of any such assumption by the successor Servicer, the Master Servicer may, in
the exercise of its business judgment, release the terminated Servicer from
liability for such representations and warranties.
Section 3.04. Liability of the Master Servicer.
Notwithstanding any Servicing Agreement, any of the provisions of this
Agreement relating to agreements or arrangements between the Master Servicer
or a Servicer or references to actions taken through a Servicer or otherwise,
the Master Servicer shall remain obligated and liable to the Trustee and
Certificateholders for the servicing and administering of the Mortgage Loans
in accordance with the provisions of Section 3.01 without diminution of such
obligation or liability by virtue of such Servicing Agreements or arrangements
or by virtue of indemnification from the Servicer and to the same extent and
under the same terms and conditions as if the Master Servicer alone were
servicing and administering the Mortgage Loans. The Master Servicer shall be
entitled to enter into any agreement with a Servicer or Seller for
indemnification of the Master Servicer and nothing contained in this Agreement
shall be deemed to limit or modify such indemnification.
Section 3.05. No Contractual Relationship Between Servicers and the
Trustee.
Any Servicing Agreement that may be entered into and any other
transactions or services relating to the Mortgage Loans involving a Servicer
in its capacity as such and not as an originator shall be deemed to be between
the Servicer and the Master Servicer alone and the Trustee and
Certificateholders shall not be deemed parties thereto and shall have no
claims, rights, obligations, duties or liabilities with respect to the
Servicer in its capacity as such except as set forth in Section 3.07.
Section 3.06. Rights of the Depositor and the Trustee in Respect of the
Master Servicer.
The Depositor may, but is not obligated to, enforce the obligations of
the Master Servicer hereunder and may, but is not obligated to, perform, or
cause a designee to perform, any defaulted obligation of the Master Servicer
hereunder and in connection with any such defaulted obligation to exercise the
related rights of the Master Servicer hereunder; provided that the Master
Servicer shall not be relieved of any of its obligations hereunder by virtue
of such performance by the Depositor or its designee. Neither the Trustee nor
the Depositor shall have any responsibility or liability for any action or
failure to act by the Master Servicer nor shall the Trustee or the Depositor
be obligated to supervise the performance of the Master Servicer hereunder or
otherwise.
Section 3.07. Trustee to Act as Master Servicer.
In the event that the Master Servicer shall for any reason no longer be
the Master Servicer hereunder (including by reason of an Event of Default),
the Trustee or its successor shall thereupon assume all of the rights and
obligations of the Master Servicer hereunder arising thereafter (except that
the Trustee shall not be (i) liable for losses of the Master Servicer pursuant
to Section 3.12 or any acts or omissions of the predecessor Master Servicer
hereunder), (ii) obligated to make Advances if it is prohibited from doing so
by applicable law, (iii) obligated to effectuate repurchases or substitutions
of Mortgage Loans hereunder, including but not limited to repurchases or
substitutions pursuant to Section 2.02 or 2.03, (iv) responsible for expenses
of the Master Servicer pursuant to Section 2.03 or (v) deemed to have made any
representations and warranties of the Master Servicer hereunder. Any such
assumption shall be subject to Section 7.02. If the Master Servicer shall for
any reason no longer be the Master Servicer (including by reason of any Event
of Default), the Trustee or its successor shall succeed to any rights and
obligations of the Master Servicer under each Servicing Agreement. The Trustee
or the successor servicer for the Trustee shall be deemed to have assumed all
of the Master Servicer's interest therein and to have replaced the Master
Servicer as a party to any Servicing Agreement entered into by the Master
Servicer as contemplated by Section 3.02 to the same extent as if the
Servicing Agreement had been assigned to the assuming party except that the
Master Servicer shall not be relieved of any liability or obligations under
any such Servicing Agreement.
The Master Servicer shall, upon request of the Trustee, but at the
expense of the Master Servicer, deliver to the assuming party all documents
and records relating to each Servicing Agreement or substitute servicing
agreement and the Mortgage Loans then being serviced thereunder and an
accounting of amounts collected or held by it and otherwise use its best
efforts to effect the orderly and efficient transfer of the substitute
Servicing Agreement to the assuming party.
Section 3.08. Collection of Mortgage Loan Payments; Servicing Accounts;
Collection Account; Certificate Account; Distribution Account.
(a) In accordance with and to the extent of the Servicing Standard, the
Master Servicer shall make reasonable efforts in accordance with the customary
and usual standards of practice of prudent mortgage servicers to collect all
payments called for under the terms and provisions of the Mortgage Loans to
the extent such procedures shall be consistent with this Agreement and the
terms and provisions of any related Required Insurance Policy. Consistent with
the foregoing, the Master Servicer may in its discretion (i) waive any late
payment charge or any prepayment charge or penalty interest in connection with
the prepayment of a Mortgage Loan and (ii) extend the due dates for payments
due on a Mortgage Note for a period not greater than 125 days; provided,
however, that the Master Servicer cannot extend the maturity of any such
Mortgage Loan past the date on which the final payment is due on the latest
maturing Mortgage Loan as of the Cut-off Date. In the event of any such
arrangement, the Master Servicer shall make Advances on the related Mortgage
Loan in accordance with the provisions of Section 4.01 during the scheduled
period in accordance with the amortization schedule of such Mortgage Loan
without modification thereof by reason of such arrangements. The Master
Servicer shall not be required to institute or join in litigation with respect
to collection of any payment (whether under a Mortgage, Mortgage Note or
otherwise or against any public or governmental authority with respect to a
taking or condemnation) if it reasonably believes that enforcing the provision
of the Mortgage or other instrument pursuant to which such payment is required
is prohibited by applicable law.
(b) In those cases where a Servicer is servicing Mortgage Loans pursuant
to a Servicing Agreement, the Master Servicer shall cause the Servicer,
pursuant to the Servicing Agreement, to establish and maintain one or more
Servicing Accounts, each of which shall be an Eligible Account. The Servicer
will be required under its Servicing Agreement to deposit into the Servicing
Account on a daily basis no later than the Business Day following receipt, all
proceeds of Mortgage Loans received by the Servicer, less its Servicing Fees
and unreimbursed Servicer Advances and expenses, to the extent permitted by
the Servicing Agreement. The Servicer shall not be required to deposit in the
Servicing Account payments or collections in the nature of prepayment charges
or late charges.
(c) The Master Servicer shall establish and maintain a Collection Account
into which the Master Servicer shall deposit or cause to be deposited on or
before each Withdrawal Date payments, collections and Servicer Advances
remitted by Servicers in respect of the Mortgage Loans.
(d) On or before the Withdrawal Date in each calendar month, the Master
Servicer shall cause the Servicer, pursuant to the Servicing Agreement, to
remit to the Master Servicer for deposit in the Collection Account all funds
held in the Servicing Account with respect to each Mortgage Loan serviced by
such Servicer that are required to be remitted to the Master Servicer. The
Servicer will also be required, pursuant to the Servicing Agreement, to
advance on or before each such Withdrawal Date amounts equal to any Scheduled
Payments (net of its Servicing Fees with respect thereto) not received on any
Mortgage Loans by the Servicer (such amount, a "Servicer Advance"). The
Servicer's obligation to advance with respect to each Mortgage Loan will
continue up to and including the first day of the month following the date on
which the related Mortgaged Property is sold at a foreclosure sale or is
acquired by the Trust Fund by deed in lieu of foreclosure or otherwise. All
such Servicer Advances received by the Master Servicer shall be deposited
promptly by it in the Collection Account or the Certificate Account, as
appropriate.
Within five Business Days after the receipt by a Servicer of a Principal
Prepayment in Full or any Liquidation Proceeds or Insurance Proceeds (not
required to be applied to the restoration or repair of the related Mortgaged
Property), the Master Servicer shall cause such Servicer, pursuant to the
related Servicing Agreement, to remit such amounts to the Master Servicer for
deposit in the Collection Account.
(e) The Master Servicer shall establish and maintain a Certificate
Account into which the Master Servicer shall deposit or cause to be deposited
on a daily basis within one Business Day of receipt, except as otherwise
specifically provided herein, the following payments and collections remitted
by Servicers or received by it in respect of Mortgage Loans subsequent to the
Cut-off Date (other than in respect of principal and interest due on the
Mortgage Loans on or before the Cut-off Date) and the following amounts
required to be deposited hereunder:
(i) all payments on account of principal on the Mortgage Loans, including
Principal Prepayments and the principal component of any Servicer Advance;
(ii) all payments on account of interest on the Mortgage Loans, net of
the sum of the related Master Servicing Fee and related Servicing Fee, and the
interest component of any Servicer Advance;
(iii) all Insurance Proceeds and Liquidation Proceeds (net of any related
expenses of the related Servicer), other than proceeds to be applied to the
restoration or repair of the Mortgaged Property or released to the Mortgagor
in accordance with the Master Servicer's normal servicing procedures;
(iv) any amount required to be deposited by the Master Servicer pursuant
to Section 3.08(g) in connection with any losses on Permitted Investments;
(v) any amounts required to be deposited by the Master Servicer pursuant
to Sections 3.12 and 3.14;
(vi) all Purchase Prices from the Master Servicer or Seller and all
Substitution Adjustment Amounts;
(vii) all Advances made by the Master Servicer pursuant to Section 4.01;
and
(viii) any other amounts required to be deposited hereunder.
In addition, with respect to any Mortgage Loan that is subject to a
buydown agreement, on each Due Date for such Mortgage Loan, in addition to the
monthly payment remitted by the Mortgagor, the Master Servicer shall cause
funds to be deposited into the Certificate Account in an amount required to
cause an amount of interest to be paid with respect to such Mortgage Loan
equal to the amount of interest that has accrued on such Mortgage Loan from
the preceding Due Date at the Mortgage Rate net of the Master Servicing Fee on
such date.
The foregoing requirements for remittance by the Master Servicer shall be
exclusive, it being understood and agreed that, without limiting the
generality of the foregoing, payments in the nature of prepayment penalties,
late payment charges or assumption fees, if collected, need not be remitted by
the Master Servicer. In the event that the Master Servicer shall remit any
amount not required to be remitted, it may at any time withdraw or direct the
institution maintaining the Certificate Account to withdraw such amount from
the Certificate Account, any provision herein to the contrary notwithstanding.
Such withdrawal or direction may be accomplished by delivering written notice
thereof to the Trustee or such other institution maintaining the Certificate
Account which describes the amounts deposited in error in the Certificate
Account. The Master Servicer shall maintain adequate records with respect to
all withdrawals made pursuant to this Section 3.08. All funds deposited in the
Certificate Account shall be held in trust for the Certificateholders until
withdrawn in accordance with Section 3.11.
(f) The Trustee shall establish and maintain, on behalf of the
Certificateholders, the Distribution Account. The Trustee shall, promptly upon
receipt, deposit in the Distribution Account and retain therein the following:
(i) the aggregate amount remitted by the Master Servicer to the Trustee
pursuant to Section 3.11(a);
(ii) any amount deposited by the Master Servicer pursuant to Section
3.08(g) in connection with any losses on Permitted Investments; and
(iii) any other amounts deposited hereunder which are required to be
deposited in the Distribution Account.
In the event that the Master Servicer shall remit any amount not required
to be remitted, it may at any time direct the Trustee to withdraw such amount
from the Distribution Account, any provision herein to the contrary
notwithstanding. Such direction may be accomplished by delivering an Officer's
Certificate to the Trustee which describes the amounts deposited in error in
the Distribution Account. All funds deposited in the Distribution Account
shall be held by the Trustee in trust for the Certificateholders until
disbursed in accordance with this Agreement or withdrawn in accordance with
Section 3.11. In no event shall the Trustee incur liability for withdrawals
from the Distribution Account at the direction of the Master Servicer.
(g) Each institution at which the Certificate Account or the Distribution
Account is maintained shall invest the funds therein as directed in writing by
the Master Servicer in Permitted Investments, which shall mature not later
than (i) in the case of the Certificate Account, the second Business Day next
preceding the related Distribution Account Deposit Date (except that if such
Permitted Investment is an obligation of the institution that maintains such
account, then such Permitted Investment shall mature not later than the
Business Day next preceding such Distribution Account Deposit Date) and (ii)
in the case of the Distribution Account, the Business Day next preceding the
Distribution Date (except that if such Permitted Investment is an obligation
of the institution that maintains such account, then such Permitted Investment
shall mature not later than such Distribution Date) and, in each case, shall
not be sold or disposed of prior to its maturity. All such Permitted
Investments shall be made in the name of the Trustee, for the benefit of the
Certificateholders. All income and gain (net of any losses) realized from any
such investment of funds on deposit in the Certificate Account or the
Distribution Account shall be for the benefit of the Master Servicer as
servicing compensation and shall be remitted to it monthly as provided herein.
The amount of any realized losses in the Certificate Account or the
Distribution Account incurred in any such account in respect of any such
investments shall promptly be deposited by the Master Servicer in the
Certificate Account or paid to the Trustee for deposit into the Distribution
Account, as applicable.
(h) The Master Servicer shall give notice to the Trustee, the Seller,
each Rating Agency and the Depositor of any proposed change of the location of
the Certificate Account not later than 30 days and not more than 45 days prior
to any change thereof. The Trustee shall give notice to the Master Servicer,
the Seller, each Rating Agency and the Depositor of any proposed change of the
location of the Distribution Account not later than 30 days and not more than
45 days prior to any change thereof.
Section 3.09. Collection of Taxes, Assessments and Similar Items; Escrow
Accounts.
(a) To the extent required by the related Mortgage Note and not violative
of current law, the Master Servicer shall cause each Servicer to establish and
maintain one or more accounts (each, an "Escrow Account") and deposit and
retain therein all collections from the Mortgagors (or advances by the
Servicer) for the payment of taxes, assessments, hazard insurance premiums or
comparable items for the account of the Mortgagors. Nothing herein shall
require the Master Servicer or any Servicer to compel a Mortgagor to establish
an Escrow Account in violation of applicable law.
(b) Withdrawals of amounts so collected from the Escrow Accounts may be
made only to effect timely payment of taxes, assessments, hazard insurance
premiums, condominium or PUD association dues, or comparable items, to
reimburse the Master Servicer or the related Servicer out of related
collections for any payments made pursuant to Sections 3.12 (with respect to
taxes and assessments and insurance premiums) and 3.13 (with respect to hazard
insurance), to refund to any Mortgagors any sums determined to be overages, to
pay interest, if required by law or the terms of the related Mortgage or
Mortgage Note, to Mortgagors on balances in the Escrow Account or to clear and
terminate the Escrow Account at the termination of this Agreement in
accordance with Section 9.01. The Escrow Accounts shall not be a part of the
Trust Fund.
(c) The Master Servicer shall advance any payments referred to in Section
3.09(a) that are not timely paid by the Mortgagors or advanced by the
Servicers on the date when the tax, premium or other cost for which such
payment is intended is due, but the Master Servicer shall be required so to
advance only to the extent that such advances, in the good faith judgment of
the Master Servicer, will be recoverable by the Master Servicer out of
Insurance Proceeds, Liquidation Proceeds or otherwise.
Section 3.10. Access to Certain Documentation and Information Regarding
the Mortgage Loans.
The Master Servicer shall afford, or shall cause the Servicers to afford,
the Depositor and the Trustee reasonable access to all records and
documentation regarding the Mortgage Loans and all accounts, insurance
information and other matters relating to this Agreement, such access being
afforded without charge, but only upon reasonable request and during normal
business hours at the office designated by the Master Servicer.
Upon reasonable advance notice in writing, the Master Servicer will
provide, or will cause the Servicers to provide, to each Certificateholder
which is a savings and loan association, bank or insurance company certain
reports and reasonable access to information and documentation regarding the
Mortgage Loans sufficient to permit such Certificateholder to comply with
applicable regulations of the OTS or other regulatory authorities with respect
to investment in the Certificates; provided that the Master Servicer and any
Servicer shall be entitled to be reimbursed by each such Certificateholder for
actual expenses incurred by the Master Servicer or such Servicer in providing
such reports and access.
The Master Servicer shall provide to the OTS and the FDIC and to
comparable regulatory authorities supervising Holders of Subordinated
Certificates and the examiners and supervisory agents of the OTS, the FDIC and
such other authorities, access to the documentation regarding the Mortgage
Loans required by applicable regulations of the OTS and the FDIC. Such access
shall be afforded only upon reasonable and prior written request and during
normal business hours at the offices designated by the Master Servicer. Unless
prohibited by applicable laws or regulations, the Master Servicer and any
Servicer shall be entitled to be reimbursed by the related Certificateholders
for actual expenses incurred by the Master Servicer or such Servicer in
providing such access. Nothing in this Section 3.10 shall limit the obligation
of the Master Servicer to observe any applicable law prohibiting disclosure of
information regarding the Mortgagors and the failure of the Master Servicer or
any Servicer to provide access as provided in this Section 3.10 as a result of
such obligation shall not constitute a breach of this Section 3.10.
Section 3.11. Permitted Withdrawals from the Certificate Account,and the
Distribution Account.
(a) The Master Servicer may from time to time make withdrawals from the
Certificate Account for the following purposes:
(i) to pay to the Master Servicer or the related Servicer (to the extent
not previously retained), the servicing compensation to which it is entitled
pursuant to Section 3.17, and to pay to the Master Servicer, as additional
master servicing compensation, earnings on or investment income with respect
to funds in or credited to the Certificate Account;
(ii) to reimburse the Master Servicer or the related Servicer for
unreimbursed Advances or Servicer Advances made by it, such right of
reimbursement pursuant to this subclause (ii) being limited to amounts
received on the Mortgage Loan(s) in respect of which any such Advance or
Servicer Advance was made;
(iii) to reimburse the Master Servicer for any Nonrecoverable Advance
previously made;
(iv) to reimburse the Master Servicer for Insured Expenses from the
related Insurance Proceeds;
(v) to reimburse the Master Servicer for (a) unreimbursed Servicing
Advances, the Master Servicer's right to reimbursement pursuant to this clause
(a) with respect to any Mortgage Loan being limited to amounts received on
such Mortgage Loan(s) which represent late recoveries of the payments for
which such advances were made pursuant to Section 3.01 or Section 3.09 and (b)
for unpaid Master Servicing Fees as provided in Section 3.14;
(vi) to pay to the purchaser, with respect to each Mortgage Loan or
property acquired in respect thereof that has been purchased pursuant to
Section 2.02, 2.03, 3.14(a), 3.14(b) or 3.14(c), all amounts received thereon
after the date of such purchase;
(vii) to reimburse the Seller, the Master Servicer or the Depositor for
expenses incurred by any of them and reimbursable pursuant to Section 6.03;
(viii) to withdraw any amount deposited in the Certificate Account and
not required to be deposited therein;
(ix) on or prior to the Distribution Account Deposit Date, to withdraw an
amount equal to the related Available Funds and the Trustee Fee for such
Distribution Date, to the extent on deposit, and remit such amount to the
Trustee for deposit in the Distribution Account; and
(x) to clear and terminate the Certificate Account upon termination of
this Agreement pursuant to Section 9.01.
The Master Servicer shall keep and maintain separate accounting, on a
Mortgage Loan by Mortgage Loan basis, for the purpose of justifying any
withdrawal from the Certificate Account pursuant to such subclauses (i), (ii),
(iv), (v) and (vi). Prior to making any withdrawal from the Certificate
Account pursuant to subclause (iii), the Master Servicer shall deliver to the
Trustee an Officer's Certificate of a Servicing Officer indicating the amount
of any previous Advance determined by the Master Servicer to be a
Nonrecoverable Advance and identifying the related Mortgage Loan(s) and their
respective portions of such Nonrecoverable Advance.
(b) The Trustee shall withdraw funds from the Distribution Account for
distributions to Certificateholders in the manner specified in this Agreement
(and to withhold from the amounts so withdrawn the amount of any taxes that it
is authorized to withhold pursuant to the last paragraph of Section 8.11). In
addition, the Trustee may from time to time make withdrawals from the
Distribution Account for the following purposes:
(i) to pay to itself the Trustee Fee for the related Distribution Date;
(ii) to pay to the Master Servicer as additional servicing compensation
earnings on or investment income with respect to funds in the Distribution
Account;
(iii) to withdraw and return to the Master Servicer any amount deposited
in the Distribution Account and not required to be deposited therein; and
(iv) to clear and terminate the Distribution Account upon termination of
the Agreement pursuant to Section 9.01.
Section 3.12. Maintenance of Hazard Insurance; Maintenance of Primary
Insurance Policies.
(a) The Master Servicer shall cause to be maintained, for each Mortgage
Loan, hazard insurance with extended coverage in an amount that is at least
equal to the lesser of (i) the maximum insurable value of the improvements
securing such Mortgage Loan or (ii) the greater of (y) the outstanding
principal balance of the Mortgage Loan and (z) an amount such that the
proceeds of such policy shall be sufficient to prevent the Mortgagor and/or
the mortgagee from becoming a co-insurer. Each such policy of standard hazard
insurance shall contain, or have an accompanying endorsement that contains, a
standard mortgagee clause. To the extent it may do so without breaching the
related Servicing Agreement, the Master Servicer shall replace any Servicer
that does not cause such insurance, to the extent it is available, to be
maintained. Any amounts collected by the Master Servicer under any such
policies (other than the amounts to be applied to the restoration or repair of
the related Mortgaged Property or amounts released to the Mortgagor in
accordance with the Master Servicer's normal servicing procedures) shall be
deposited in the Certificate Account or the related Servicing Account, as
applicable. Any cost incurred by the Master Servicer or any Servicer in
maintaining any such insurance shall not, for the purpose of calculating
monthly distributions to the Certificateholders or remittances to the Trustee
for their benefit, be added to the principal balance of the Mortgage Loan,
notwithstanding that the terms of the Mortgage Loan so permit. Such costs
shall be recoverable by the Master Servicer out of late payments by the
related Mortgagor or out of Liquidation Proceeds to the extent permitted by
Section 3.11. It is understood and agreed that no earthquake or other
additional insurance is to be required of any Mortgagor or maintained on
property acquired in respect of a Mortgage other than pursuant to such
applicable laws and regulations as shall at any time be in force and as shall
require such additional insurance. If the Mortgaged Property is located at the
time of origination of the Mortgage Loan in a federally designated special
flood hazard area and such area is participating in the national flood
insurance program, the Master Servicer shall cause flood insurance to be
maintained with respect to such Mortgage Loan. Such flood insurance shall be
in an amount equal to the least of (i) the original principal balance of the
related Mortgage Loan, (ii) the replacement value of the improvements which
are part of such Mortgaged Property, and (iii) the maximum amount of such
insurance available for the related Mortgaged Property under the national
flood insurance program.
In the event that the Master Servicer shall obtain and maintain a blanket
policy insuring against hazard losses on all of the Mortgage Loans, it shall
conclusively be deemed to have satisfied its obligations as set forth in the
first sentence of this Section 3.12, it being understood and agreed that such
policy may contain a deductible clause on terms substantially equivalent to
those commercially available and maintained by comparable servicers. If such
policy contains a deductible clause, the Master Servicer shall, in the event
that there shall not have been maintained on the related Mortgaged Property a
policy complying with the first sentence of this Section 3.12, and there shall
have been a loss that would have been covered by such policy, deposit in the
Certificate Account the amount not otherwise payable under the blanket policy
because of such deductible clause. In connection with its activities as Master
Servicer of the Mortgage Loans, the Master Servicer agrees to present, on
behalf of itself, the Depositor, and the Trustee for the benefit of the
Certificateholders, claims under any such blanket policy.
(b) The Master Servicer shall not take, or permit any Servicer to take,
any action which would result in non-coverage under any applicable Primary
Insurance Policy of any loss which, but for the actions of the Master Servicer
or any Servicer, would have been covered thereunder. The Master Servicer shall
not cancel or refuse to renew any such Primary Insurance Policy that is in
effect at the date of the initial issuance of the Certificates and is required
to be kept in force hereunder unless the replacement Primary Insurance Policy
for such canceled or non-renewed policy is maintained with a Qualified
Insurer. The Master Servicer shall not be required to maintain any Primary
Insurance Policy (i) with respect to any Mortgage Loan with a Loan-to-Value
Ratio less than or equal to 80% as of any date of determination or, based on a
new appraisal, the principal balance of such Mortgage Loan represents 80% or
less of the new Appraised Value or (ii) if maintaining such Primary Insurance
Policy is prohibited by applicable law. The Master Servicer agrees, to the
extent permitted by applicable law, to effect the timely payment of the
premiums on each Primary Insurance Policy, and such costs not otherwise
recoverable shall be recoverable by the Master Servicer from the related
liquidation proceeds.
In connection with its activities as Master Servicer of the Mortgage
Loans, the Master Servicer agrees to present, or cause the related Servicer to
present, on behalf of itself, the Trustee and the Certificateholders, claims
to the insurer under any Primary Insurance Policies and, in this regard, to
take such reasonable action in accordance with the Servicing Standard as shall
be necessary to permit recovery under any Primary Insurance Policies
respecting defaulted Mortgage Loans. Any amounts collected by a Servicer or
the Master Servicer under any Primary Insurance Policies shall be deposited in
the Servicing Account, the Collection Account or the Certificate Account, as
applicable.
Section 3.13. Enforcement of Due-On-Sale Clauses; Assumption Agreements.
(a) Except as otherwise provided in this Section 3.13, when any property
subject to a Mortgage has been conveyed by the Mortgagor, the Master Servicer
or the related Servicer shall, to the extent that it has knowledge of such
conveyance and in accordance with the Servicing Standard, enforce any
due-on-sale clause contained in any Mortgage Note or Mortgage, to the extent
permitted under applicable law and governmental regulations, but only to the
extent that such enforcement will not adversely affect or jeopardize coverage
under any Required Insurance Policy. Notwithstanding the foregoing, neither
the Master Servicer nor the related Servicer is required to exercise such
rights with respect to a Mortgage Loan if the Person to whom the related
Mortgaged Property has been conveyed or is proposed to be conveyed satisfies
the terms and conditions contained in the Mortgage Note and Mortgage related
thereto and the consent of the mortgagee under such Mortgage Note or Mortgage
is not otherwise so required under such Mortgage Note or Mortgage as a
condition to such transfer. In the event that (i) the Master Servicer or the
related Servicer is prohibited by law from enforcing any such due-on-sale
clause, (ii) coverage under any Required Insurance Policy would be adversely
affected, (iii) the Mortgage Note does not include a due-on-sale clause or
(iv) nonenforcement is otherwise permitted hereunder, the Master Servicer is
authorized, subject to Section 3.13(b), to take or enter into an assumption
and modification agreement from or with the person to whom such property has
been or is about to be conveyed, pursuant to which such person becomes liable
under the Mortgage Note and, unless prohibited by applicable state law, the
Mortgagor remains liable thereon, provided that the Mortgage Loan shall
continue to be covered (if so covered before the Master Servicer enters such
agreement) by the applicable Required Insurance Policies. The Master Servicer,
subject to Section 3.13(b), is also authorized with the prior approval of the
insurers under any Required Insurance Policies to enter into a substitution of
liability agreement with such Person, pursuant to which the original Mortgagor
is released from liability and such Person is substituted as Mortgagor and
becomes liable under the Mortgage Note. Notwithstanding the foregoing, the
Master Servicer shall not be deemed to be in default under this Section 3.13
by reason of any transfer or assumption which the Master Servicer reasonably
believes it is restricted by law from preventing, for any reason whatsoever.
(b) Subject to the Master Servicer's duty to enforce any due-on-sale
clause to the extent set forth in Section 3.13(a), in any case in which a
Mortgaged Property has been conveyed to a Person by a Mortgagor, and such
Person is to enter into an assumption agreement or modification agreement or
supplement to the Mortgage Note or Mortgage that requires the signature of the
Trustee, or if an instrument of release signed by the Trustee is required
releasing the Mortgagor from liability on the Mortgage Loan, the Master
Servicer shall prepare and deliver or cause to be prepared and delivered to
the Trustee for signature and shall direct, in writing, the Trustee to execute
the assumption agreement with the Person to whom the Mortgaged Property is to
be conveyed and such modification agreement or supplement to the Mortgage Note
or Mortgage or other instruments as are reasonable or necessary to carry out
the terms of the Mortgage Note or Mortgage or otherwise to comply with any
applicable laws regarding assumptions or the transfer of the Mortgaged
Property to such Person. In connection with any such assumption, no material
term of the Mortgage Note may be changed. In addition, the substitute
Mortgagor and the Mortgaged Property must be acceptable to the Master Servicer
in accordance with its underwriting standards as then in effect. Together with
each such substitution, assumption or other agreement or instrument delivered
to the Trustee for execution by it, the Master Servicer shall deliver an
Officer's Certificate signed by a Servicing Officer stating that the
requirements of this subsection have been met in connection therewith. The
Master Servicer shall notify, or cause the related Servicer to notify, the
Trustee that any such substitution or assumption agreement has been completed
by forwarding to the Trustee the original of such substitution or assumption
agreement, which in the case of the original shall be added to the related
Mortgage File and shall, for all purposes, be considered a part of such
Mortgage File to the same extent as all other documents and instruments
constituting a part thereof. Any fee collected by the Master Servicer or any
Servicer for entering into an assumption or substitution of liability
agreement will be retained by the Master Servicer as additional master
servicing compensation.
Section 3.14. Realization Upon Defaulted Mortgage Loans; Repurchase of
Certain Mortgage Loans.
(a) The Master Servicer shall use reasonable efforts in accordance with
the Servicing Standard to foreclose upon or otherwise comparably convert the
ownership of Mortgaged Properties in respect of which the related Mortgage
Loans come into and continue in default and as to which no satisfactory
arrangements can be made for collection of delinquent payments. In connection
with such foreclosure or other conversion, the Master Servicer shall follow
the Servicing Standard and shall follow the requirements of the insurer under
any Required Insurance Policy; provided, however, that the Servicer may enter
into, and shall give the Rating Agencies notice of, a special servicing
agreement with an unaffiliated holder of 100% Percentage Interest of one or
more Classes of Subordinated Certificates or a holder of a class of securities
representing interests in one or more Classes of Subordinated Certificates and
provided, further, that entering into such special servicing agreement shall
not result in the downgrading or withdrawal of the respective ratings when
assigned to the Certificates. Any such agreement may contain provisions
whereby such holder may instruct the Servicer to commence or delay foreclosure
proceedings with respect to delinquent Mortgage Loans and will contain
provisions for the deposit of cash by the holder that would be available for
distribution to Certificateholders if Liquidation Proceeds are less than they
otherwise may have been had the Servicer acted in accordance with its normal
procedures. Notwithstanding the foregoing, the Master Servicer shall not be
required to expend its own funds in connection with any foreclosure or towards
the restoration of any property unless it shall determine (i) that such
restoration and/or foreclosure will increase the proceeds of liquidation of
the Mortgage Loan after reimbursement to itself of such expenses and (ii) that
such expenses will be recoverable to it through Liquidation Proceeds
(respecting which it shall have priority for purposes of withdrawals from the
Certificate Account). The Master Servicer shall be responsible for all other
costs and expenses incurred by it in any such proceedings; provided, however,
that it shall be entitled to reimbursement thereof from the liquidation
proceeds with respect to the related Mortgaged Property, as provided in the
definition of Liquidation Proceeds. If the Master Servicer has knowledge that
a Mortgaged Property which the Master Servicer is contemplating acquiring in
foreclosure or by deed in lieu of foreclosure is located within a 1 mile
radius of any site listed in the Expenditure Plan for the Hazardous Substance
Clean Up Bond Act of 1984 or other site with environmental or hazardous waste
risks known to the Master Servicer, the Master Servicer will, prior to
acquiring the Mortgaged Property, consider such risks and only take action in
accordance with its established environmental review procedures.
With respect to any REO Property, the deed or certificate of sale shall
be taken in the name of the Trustee for the benefit of the Certificateholders,
or its nominee, on behalf of the Certificateholders. The Trustee's name shall
be placed on the title to such REO Property solely as the Trustee hereunder
and not in its individual capacity. The Master Servicer shall ensure that the
title to such REO Property references the Pooling and Servicing Agreement and
the Trustee's capacity hereunder. Pursuant to its efforts to sell such REO
Property, the Master Servicer shall either itself or through an agent selected
by the Master Servicer protect and conserve such REO Property in accordance
with the Servicing Standard and may, incident to its conservation and
protection of the interests of the Certificateholders, rent the same, or any
part thereof, as the Master Servicer deems to be in the best interest of the
Certificateholders for the period prior to the sale of such REO Property. The
Master Servicer shall prepare for and deliver to the Trustee a statement with
respect to each REO Property that has been rented showing the aggregate rental
income received and all expenses incurred in connection with the management
and maintenance of such REO Property at such times as is necessary to enable
the Trustee to comply with the reporting requirements of the REMIC Provisions.
The net monthly rental income, if any, from such REO Property shall be
deposited in the Certificate Account no later than the close of business on
each Determination Date. The Master Servicer shall perform the tax reporting
and withholding required by Sections 1445 and 6050J of the Code with respect
to foreclosures and abandonments, the tax reporting required by Section 6050H
of the Code with respect to the receipt of mortgage interest from individuals
and, if required by Section 6050P of the Code with respect to the cancellation
of indebtedness by certain financial entities, by preparing such tax and
information returns as may be required, in the form required, and delivering
the same to the Trustee for filing.
In the event that the Trust Fund acquires any Mortgaged Property as
aforesaid or otherwise in connection with a default or imminent default on a
Mortgage Loan, the Master Servicer shall dispose of such Mortgaged Property
prior to three years after its acquisition by the Trust Fund unless the
Trustee shall have been supplied with an Opinion of Counsel to the effect that
the holding by the Trust Fund of such Mortgaged Property subsequent to such
three-year period will not result in the imposition of taxes on "prohibited
transactions" on the REMIC as defined in section 860F of the Code or cause the
REMIC to fail to qualify as a REMIC at any time that any Certificates are
outstanding, in which case the Trust Fund may continue to hold such Mortgaged
Property (subject to any conditions contained in such Opinion of Counsel).
Notwithstanding any other provision of this Agreement, no Mortgaged Property
acquired by the Trust Fund shall be rented (or allowed to continue to be
rented) or otherwise used for the production of income by or on behalf of the
Trust Fund in such a manner or pursuant to any terms that would (i) cause such
Mortgaged Property to fail to qualify as "foreclosure property" within the
meaning of Section 860G(a)(8) of the Code or (ii) subject the REMIC to the
imposition of any federal, state or local income taxes on the income earned
from such Mortgaged Property under Section 860G(c) of the Code or otherwise,
unless the Master Servicer has agreed to indemnify and hold harmless the Trust
Fund with respect to the imposition of any such taxes.
The decision of the Master Servicer to foreclose on a defaulted Mortgage
Loan shall be subject to a determination by the Master Servicer that the
proceeds of such foreclosure would exceed the costs and expenses of bringing
such a proceeding. The income earned from the management of any REO
Properties, net of reimbursement to the Master Servicer for expenses incurred
(including any property or other taxes) in connection with such management and
net of unreimbursed Master Servicing Fees, Servicing Fees, Advances, Servicer
Advances and Servicing Advances, shall be applied to the payment of principal
of and interest on the related defaulted Mortgage Loans (with interest
accruing as though such Mortgage Loans were still current and adjustments, if
applicable, to the Mortgage Rate were being made in accordance with the terms
of the Mortgage Note) and all such income shall be deemed, for all purposes in
this Agreement, to be payments on account of principal and interest on the
related Mortgage Notes and shall be deposited into the Certificate Account. To
the extent the net income received during any calendar month is in excess of
the amount attributable to amortizing principal and accrued interest at the
related Mortgage Rate on the related Mortgage Loan for such calendar month,
such excess shall be considered to be a partial prepayment of principal of the
related Mortgage Loan.
The proceeds from any liquidation of a Mortgage Loan, as well as any
income from an REO Property, will be applied in the following order of
priority: first, to reimburse the Master Servicer or the related Servicer for
any related unreimbursed Servicing Advances, Master Servicing Fees and
Servicing Fees, as applicable; second, to reimburse the Master Servicer or the
related Servicer for any unreimbursed Advances or Servicer Advances, as
applicable, and to reimburse the Certificate Account for any Nonrecoverable
Advances (or portions thereof) that were previously withdrawn by the Master
Servicer pursuant to Section 3.11(a)(iii) that related to such Mortgage Loan;
third, to accrued and unpaid interest (to the extent no Advance or Servicer
Advance has been made for such amount or any such Advance or Servicer Advance
has been reimbursed) on the Mortgage Loan or related REO Property, at the
Adjusted Net Mortgage Rate to the Due Date occurring in the month in which
such amounts are required to be distributed; and fourth, as a recovery of
principal of the Mortgage Loan. Excess Proceeds, if any, from the liquidation
of a Liquidated Mortgage Loan will be retained by the Master Servicer as
additional servicing compensation pursuant to Section 3.17.
(b) The Master Servicer, in its sole discretion, shall have the right to
purchase for its own account from the Trust Fund any Mortgage Loan which is 91
days or more delinquent at a price equal to the Purchase Price. The Purchase
Price for any Mortgage Loan purchased hereunder shall be deposited in the
Certificate Account and the Trustee, upon receipt of a certificate from the
Master Servicer in the form of Exhibit N hereto, shall release or cause to be
released to the purchaser of such Mortgage Loan the related Mortgage File and
shall execute and deliver such instruments of transfer or assignment prepared
by the purchaser of such Mortgage Loan, in each case without recourse, as
shall be necessary to vest in the purchaser of such Mortgage Loan any Mortgage
Loan released pursuant hereto and the purchaser of such Mortgage Loan shall
succeed to all the Trustee's right, title and interest in and to such Mortgage
Loan and all security and documents related thereto. Such assignment shall be
an assignment outright and not for security. The purchaser of such Mortgage
Loan shall thereupon own such Mortgage Loan, and all security and documents,
free of any further obligation to the Trustee or the Certificateholders with
respect thereto.
(c) The Master Servicer may agree to a modification of any Mortgage Loan
(the "Relevant Mortgage Loan") upon the request of the related Mortgagor,
provided that the modification is in lieu of a refinancing and the Mortgage
Rate on the Relevant Mortgage Loan, as modified, is approximately a prevailing
market rate for newly-originated mortgage loans having similar terms and (ii)
the Master Servicer purchases the Relevant Mortgage Loan from the Trust Fund
as described below. Effective immediately after such modification, and, in any
event, on the same Business Day on which the modification occurs, all right,
title and interest of the Trustee in and to the Modified Mortgage Loan shall
automatically be deemed transferred and assigned to the Master Servicer and
all benefits and burdens of ownership thereof, including without limitation
the right to accrued interest thereon from and including the date of
modification and the risk of default thereon, shall pass to the Master
Servicer. The Master Servicer shall promptly deliver to the Trustee a
certification of a Servicing Officer to the effect that all requirements of
the first paragraph of this subsection (c) have been satisfied with respect to
such Modified Mortgage Loan.
The Master Servicer shall deposit the Purchase Price for any Modified
Mortgage Loan in the Certificate Account pursuant to Section 3.08(e) within
one Business Day after the purchase of such Modified Mortgage Loan. Upon
receipt by the Trustee of written notification of any such deposit signed by a
Servicing Officer, the Trustee shall release to the Master Servicer the
related Mortgage File and shall execute and deliver such instruments of
transfer or assignment, in each case without recourse, as shall be necessary
to vest in the Master Servicer any Modified Mortgage Loan previously
transferred and assigned pursuant hereto.
The Master Servicer covenants and agrees to indemnify the Trust Fund
against any and all liability for any "prohibited transaction" taxes and any
related interest, additions and penalties imposed on the Trust Fund
established hereunder as a result of any modification of a Mortgage Loan
effected pursuant to this subsection (c), any holding of a Modified Mortgage
Loan by the Trust Fund or any purchase of a Modified Mortgage Loan by the
Master Servicer (but such obligation shall not prevent the Master Servicer or
any other appropriate Person from contesting any such tax in appropriate
proceedings and shall not prevent the Master Servicer from withholding payment
of such tax, if permitted by law, pending the outcome of such proceedings).
The Master Servicer shall have no right of reimbursement for any amount paid
pursuant to the foregoing indemnification, except to the extent that the
amount of any tax, interest and penalties, together with interest thereon, is
refunded to the Trust Fund or the Master Servicer.
Section 3.15. Trustee to Cooperate; Release of Mortgage Files.
Upon the payment in full of any Mortgage Loan, or the receipt by the
Master Servicer of a notification that payment in full will be escrowed in a
manner customary for such purposes, the Master Servicer will immediately
notify the Trustee by delivering, or causing to be delivered, a "Request for
Release" substantially in the form of Exhibit N. Upon receipt of such request,
the Trustee shall promptly release the related Mortgage File to the Master
Servicer, and the Trustee shall at the Master Servicer's direction execute and
deliver to the Master Servicer the request for reconveyance, deed of
reconveyance or release or satisfaction of mortgage or such instrument
releasing the lien of the Mortgage in each case provided by the Master
Servicer, together with the Mortgage Note with written evidence of
cancellation thereon. Expenses incurred in connection with any instrument of
satisfaction or deed of reconveyance shall be chargeable to the related
Mortgagor. From time to time and as shall be appropriate for the servicing or
foreclosure of any Mortgage Loan, including for such purpose collection under
any policy of flood insurance, any fidelity bond or errors or omissions
policy, or for the purposes of effecting a partial release of any Mortgaged
Property from the lien of the Mortgage or the making of any corrections to the
Mortgage Note or the Mortgage or any of the other documents included in the
Mortgage File, the Trustee shall, upon delivery to the Trustee of a Request
for Release in the form of Exhibit M signed by a Servicing Officer, release
the Mortgage File to the Master Servicer or, at the Master Servicer's
direction, to the related Servicer. Subject to the further limitations set
forth below, the Master Servicer shall cause the Mortgage File or documents so
released to be returned to the Trustee when the need therefor by the Master
Servicer no longer exists, unless the Mortgage Loan is liquidated and the
proceeds thereof are deposited in the Certificate Account, in which case the
Master Servicer shall deliver to the Trustee a Request for Release in the form
of Exhibit N, signed by a Servicing Officer.
If the Master Servicer at any time seeks to initiate a foreclosure
proceeding in respect of any Mortgaged Property as authorized by this
Agreement, the Master Servicer shall deliver or cause to be delivered to the
Trustee, for signature, as appropriate, any court pleadings, requests for
trustee's sale or other documents necessary to effectuate such foreclosure or
any legal action brought to obtain judgment against the Mortgagor on the
Mortgage Note or the Mortgage or to obtain a deficiency judgment or to enforce
any other remedies or rights provided by the Mortgage Note or the Mortgage or
otherwise available at law or in equity.
Section 3.16. Documents, Records and Funds in Possession of the Master
Servicer to be Held for the Trustee.
The Master Servicer shall account fully to the Trustee for any funds
received by the Master Servicer or which otherwise are collected by the Master
Servicer as Liquidation Proceeds or Insurance Proceeds in respect of any
Mortgage Loan. All Mortgage Files and funds collected or held by, or under the
control of, the Master Servicer in respect of any Mortgage Loans, whether from
the collection of principal and interest payments or from Liquidation
Proceeds, including but not limited to, any funds on deposit in the
Certificate Account, shall be held by the Master Servicer for and on behalf of
the Trustee and shall be and remain the sole and exclusive property of the
Trustee, subject to the applicable provisions of this Agreement. The Master
Servicer also agrees that it shall not create, incur or subject any Mortgage
File or any funds that are deposited in the Certificate Account, Distribution
Account or any Escrow Account or Servicing Account, or any funds that
otherwise are or may become due or payable to the Trustee for the benefit of
the Certificateholders, to any claim, lien, security interest, judgment, levy,
writ of attachment or other encumbrance, or assert by legal action or
otherwise any claim or right of setoff against any Mortgage File or any funds
collected on, or in connection with, a Mortgage Loan, except, however, that
the Master Servicer shall be entitled to set off against and deduct from any
such funds any amounts that are properly due and payable to the Master
Servicer under this Agreement.
Section 3.17. Servicing Compensation.
As compensation for its activities hereunder, the Master Servicer shall
be entitled out of each payment of interest on a Mortgage Loan (or portion
thereof) included in the Trust Fund to retain or withdraw from the Certificate
Account an amount equal to the Master Servicing Fee for such Distribution
Date.
Additional master servicing compensation in the form of Excess Proceeds,
prepayment penalties, assumption fees, late payment charges and all income and
gain net of any losses realized from Permitted Investments shall be retained
by the Master Servicer to the extent not required to be deposited in the
Certificate Account pursuant to Section 3.08. The Master Servicer shall be
required to pay all expenses incurred by it in connection with its servicing
activities hereunder (including payment of any premiums for hazard insurance
and any Primary Insurance Policy and maintenance of the other forms of
insurance coverage required by this Agreement) and shall not be entitled to
reimbursement therefor except as specifically provided in this Agreement.
As compensation for its activities under its Servicing Agreement, each
Servicer shall be entitled to retain out of each payment of interest on a
Mortgage Loan (or portion thereof) included in the Trust Fund an amount equal
to interest at the applicable Servicing Fee Rate on the Stated Principal
Balance of the related Mortgage Loan for the period covered by such interest
payment.
Additional servicing compensation in the form of prepayment penalties,
assumption fees and late payment charges shall be retained by the Servicers to
the extent not required to be deposited in the Servicing Accounts pursuant to
the related Servicing Agreement. Each Servicer shall be required to pay all
expenses incurred by it in connection with its servicing activities under its
Servicing Agreement (including payment of any premium for hazard insurance and
any Primary Insurance Policy and maintenance of the other forms of insurance
coverage required by this Agreement and its Servicing Agreement) and shall not
be entitled to reimbursement therefor except as specifically provided in its
Servicing Agreement and not inconsistent with this Agreement.
In the event of any Prepayment Interest Shortfall, the aggregate Master
Servicing Fee for such Distribution Date shall be reduced (but not below zero)
by an amount equal to such Prepayment Interest Shortfall.
Section 3.18. Annual Statement as to Compliance.
The Master Servicer shall deliver to the Depositor and the Trustee on or
before 120 days after the end of the Master Servicer's fiscal year, commencing
with its 1999 fiscal year, an Officer's Certificate stating, as to the signer
thereof, that (i) a review of the activities of the Master Servicer during the
preceding calendar year and of the performance of the Master Servicer under
this Agreement has been made under such officer's supervision, (ii) to the
best of such officer's knowledge, based on such review, the Master Servicer
has fulfilled all its obligations under this Agreement throughout such year,
or, if there has been a default in the fulfillment of any such obligation,
specifying each such default known to such officer and the nature and status
thereof and (iii) to the best of such officer's knowledge, each Servicer has
fulfilled all its obligations under its Servicing Agreement throughout such
year, or, if there has been a default in the fulfillment of any such
obligation, specifying each such default known to such officer and the nature
and status thereof. The Trustee shall forward a copy of each such statement to
each Rating Agency.
Section 3.19. Annual Independent Public Accountants' Servicing Statement;
Financial Statements.
On or before 120 days after the end of the Master Servicer's fiscal year,
commencing with its 1999 fiscal year, the Master Servicer at its expense shall
cause a nationally or regionally recognized firm of independent public
accountants (who may also render other services to the Servicer, the Seller or
any affiliate thereof) which is a member of the American Institute of
Certified Public Accountants to furnish a statement to the Trustee and the
Depositor to the effect that such firm has examined certain documents and
records relating to the servicing of the Mortgage Loans under this Agreement
or of mortgage loans under pooling and servicing agreements substantially
similar to this Agreement (such statement to have attached thereto a schedule
setting forth the pooling and servicing agreements covered thereby) and that,
on the basis of such examination, conducted substantially in compliance with
the Uniform Single Attestation Program for Mortgage Bankers or the Audit
Program for Mortgages serviced for FNMA and FHLMC, such servicing has been
conducted in compliance with such pooling and servicing agreements except for
such significant exceptions or errors in records that, in the opinion of such
firm, the Uniform Single Attestation Program for Mortgage Bankers or the Audit
Program for Mortgages serviced for FNMA and FHLMC requires it to report. In
rendering such statement, such firm may rely, as to matters relating to direct
servicing of mortgage loans by Subservicers, upon comparable statements for
examinations conducted substantially in compliance with the Uniform Single
Attestation Program for Mortgage Bankers or the Audit Program for Mortgages
serviced for FNMA and FHLMC (rendered within one year of such statement) of
independent public accountants with respect to the related Subservicer. Copies
of such statement shall be provided by the Trustee to any Certificateholder
upon request at the Master Servicer's expense, provided that such statement is
delivered by the Master Servicer to the Trustee.
Section 3.20. Errors and Omissions Insurance; Fidelity Bonds.
The Master Servicer shall obtain and maintain in force, and shall cause
each Servicer to obtain and maintain in force, (a) a policy or policies of
insurance covering errors and omissions in the performance of its obligations
as Master Servicer hereunder or as Servicer under its Servicing Agreement, as
the case may be, and (b) a fidelity bond in respect of its officers, employees
and agents. Each such policy or policies and bond shall, together, comply with
the requirements from time to time of FNMA or FHLMC for persons performing
servicing for mortgage loans purchased by FNMA or FHLMC. In the event that any
such policy or bond ceases to be in effect, the Master Servicer shall obtain a
comparable replacement policy or bond from an insurer or issuer meeting the
requirements set forth above as of the date of such replacement.
<PAGE>
ARTICLE IV
DISTRIBUTIONS AND
ADVANCES BY THE MASTER SERVICER
Section 4.01. Advances.
The Master Servicer shall determine on or before each Master Servicer
Advance Date whether it is required to make an Advance pursuant to the
definition thereof. If the Master Servicer determines it is required to make
an Advance, it shall, on or before the Master Servicer Advance Date, either
(i) deposit into the Certificate Account an amount equal to the Advance or
(ii) make an appropriate entry in its records relating to the Certificate
Account that any Amount Held for Future Distribution has been used by the
Master Servicer in discharge of its obligation to make any such Advance. Any
funds so applied shall be replaced by the Master Servicer by deposit in the
Certificate Account no later than the close of business on the next Master
Servicer Advance Date. The Master Servicer shall be entitled to be reimbursed
from the Certificate Account for all Advances of its own funds made pursuant
to this Section 4.01 as provided in Section 3.09. The obligation to make
Advances with respect to any Mortgage Loan shall continue if such Mortgage
Loan has been foreclosed or otherwise terminated and the related Mortgaged
Property has not been liquidated. The Master Servicer shall inform the Trustee
of the amount of the Advance to be made on each Master Servicer Advance Date
no later than the second Business Day before the related Distribution Date.
The Master Servicer shall deliver to the Trustee on the related Master
Servicer Advance Date an Officer's Certificate of a Servicing Officer
indicating the amount of any proposed Advance determined by the Master
Servicer to be a Nonrecoverable Advance.
Section 4.02. Priorities of Distribution.
On each Distribution Date, the Trustee, by treating such amounts as paid
with respect to regular interests from Tier One REMIC to Tier Two REMIC and
Tier Two REMIC to the Master REMIC and then will make the disbursements and
transfers from amounts then on deposit in the Distribution Account in the
following order of priority and, in each case, to the extent of the related
Available Funds remaining:
(i) to the holders of each Class of Certificates in the
following order or priority:
(a) to the Class R Certificates and each Class of Class A
Certificates, the aggregate of the related Class Optimal
Interest Distribution Amount and any Unpaid Interest Amounts
for such Classes, PRO RATA , based on the amount of interest
which each such Class is entitled to receive on such
Distribution Date;
(b) to the Class M-1 Certificates , the Class Optimal
Interest Distribution Amount for such Class on such
Distribution Date;
(c) to the Class M-2 Certificates , the Class Optimal
Interest Distribution Amount for such Class on such
Distribution Date;
(d) to the Class M-3 Certificates , the Class Optimal
Interest Distribution Amount for such Class on such
Distribution Date;
(ii) on each Distribution Date (a) before the Stepdown Date or
(b) with respect to which a Trigger Event is in effect, to the holders of the
Class or Classes of Offered Certificates then entitled to distributions of
principal as set forth below, an amount equal to the Principal Distribution
Amount in the following order of priority:
(x) to the Class R Certificates, the Class A Principal
Distribution Amount, until the Class Certificate Balance
thereof is reduced to zero;
(y) to the Class A Certificates, the Class A Principal
Distribution Amount ; provided, that the Class A
Principal Distribution Amount is required to be
distributed as follows: first the Class A-3
Distribution Amount to the Class A-3 Certificates, and
then the remaining Class A Principal Distribution
Amount shall be paid sequentially to the Class A-1,
Class A-2 and Class A-3 Certificates, in that order,
until the respective Class Certificate Balances thereof
have been reduced to zero; PROVIDED, HOWEVER, that on
any Distribution Date on which the aggregate Class
Certificate Balances of the Class A Certificates are
equal to or greater than the aggregate Stated Principal
balances of the Mortgage Loans, the Class A Principal
Distribution Amount shall be distributed PRO RATA and
not sequentially;
(z) sequentially to the Class M-1, Class M-2 and Class M-3
Certificates, in that order, until the respective Class
Certificate Balances are reduced to zero;
B. on each Distribution Date (a) on and after the Stepdown Date
and (b) as long as a Trigger Event is not in effect, to the holders of the
Class or Classes of Offered Certificates then entitled to distribution of
principal an amount equal to, in the aggregate, the Principal Distribution
Amount in the following amounts and order of priority:
(a) the lesser of (x) the Principal Distribution Amount and (y)
the Class A Principal Distribution Amount, in the following order of priority:
(1) to the Class R Certificates, the Class A Principal
Distribution Amount, until the Class Certificate Balance thereof is reduced to
zero;
(2) to the Class A Certificates, the Class A Principal
Distribution Amount; provided, that the Class A Principal Distribution Amount
is required to be distributed as follows: first the Class A-3 Distribution
Amount to the Class A-3 Certificates, and then the remaining Class A Principal
Distribution Amount shall be paid sequentially to the Class A-1, Class A-2 and
Class A-3 Certificates, in that order, until the respective Class Certificate
Balances thereof have been reduced to zero; PROVIDED, HOWEVER, that on any
Distribution Date on which the aggregate Class Certificate Balances of the
Class A Certificates are equal to or greater than the aggregate Stated
Principal Balances of the Mortgage Loans, the Class A Principal Distribution
Amount shall be distributed PRO RATA and not sequentially;
(b) the lesser of (x) the excess of (i) the Principal Distribution Amount
over (ii) the amount distributed to the Class R and Class A Certificateholders
in clause (ii) B. (a) above and (y) the Class M-1 Principal Distribution
Amount to the Class M-1 Certificateholders, until the Class Certificate
Balance thereof has been reduced to zero;
(c) the lesser of (x) the excess of (i) the Principal Distribution Amount
over (ii) the amount distributed to the Class A Certificateholders in clause
(ii) B. (a) above and to the Class M-1 Certificates in clause (ii) B. (b)
above and (y) the Class M-2 Principal Distribution Amount to the Class M-2
Certificateholders, until the Class Certificate Balance thereof has been
reduced to zero;
(d) the lesser of (x) the excess of (i) the Principal Distribution Amount
over (ii) the amount distributed to the Class R and Class A Certificateholders
in clause (ii) B. (a) above, to the Class M-1 Certificates in clause (ii) B.
(b) above and to the Class M-2 Certificates in clause (ii) B. (c) above and
(y) the Class M-3 Principal Distribution Amount to the Class M-3
Certificateholders, until the Class Certificate Balance thereof has been
reduced to zero;
(iii) any amount remaining after the distributions in clauses (i) and
(ii) above shall be distributed in the following order of priority:
(a) to fund the Extra Principal Distribution Amount for such Distribution
Date to be paid as a component of the Principal Distribution Amount in the
same order of priority as described in clause (ii) above;
(b) to the holders of the Class M-1 Certificates, any Unpaid Interest
Amounts for such Class;
(c) to the holders of the Class M-1 Certificates, any Unpaid Realized
Loss Amount for such Class;
(d) to the holders of the Class M-2 Certificates, any Unpaid Interest
Amounts for such Class;
(e) to the holders of the Class M-2 Certificates, any Unpaid Realized
Loss Amount for such Class;
(f) to the holders of the Class M-3 Certificates, any Unpaid Interest
Amounts for such Class;
(g) to the holders of the Class M-3 Certificates, any Unpaid Realized
Loss Amount for such Class;
(h) to the holders of the Class OC Certificates; and
(i) to the holders of the Class R Certificates, any remaining amount.
Section 4.03. Monthly Statements to Certificateholders.
(a) Not later than each Distribution Date, the Trustee shall prepare and
cause to be forwarded by first class mail to each Certificateholder, the
Master Servicer, the Depositor and each Rating Agency a statement setting
forth with respect to the related distribution:
(i) the amount thereof allocable to principal, separately identifying the
aggregate amount of any Principal Prepayments and Liquidation Proceeds
included therein;
(ii) the amount thereof allocable to interest, any Unpaid Interest
Amounts included in such distribution and any remaining Unpaid Interest
Amounts after giving effect to such distribution;
(iii) if the distribution to the Holders of such Class of Certificates is
less than the full amount that would be distributable to such Holders if there
were sufficient funds available therefor, the amount of the shortfall and the
allocation thereof as between principal and interest;
(iv) the Class Certificate Balance of each Class of Certificates after
giving effect to the distribution of principal on such Distribution Date;
(v) the Pool Stated Principal Balance for the following Distribution
Date;
(vi) the amount of the Master Servicing Fees and Servicing Fees paid to
or retained by the Master Servicer and the Servicers (with respect to the
Servicers, in the aggregate) with respect to such Distribution Date;
(vii) the Pass-Through Rate for each such Class of Certificates with
respect to such Distribution Date;
(viii) the amount of Advances included in the distribution on such
Distribution Date and the aggregate amount of Advances outstanding as of the
close of business on such Distribution Date;
(ix) the number and aggregate principal amounts of Mortgage Loans (A)
delinquent (exclusive of Mortgage Loans in foreclosure) (1) 1 to 30 days (2)
31 to 60 days (3) 61 to 90 days and (4) 91 or more days and (B) in foreclosure
and delinquent (1) 1 to 30 days (2) 31 to 60 days (3) 61 to 90 days and (4) 91
or more days, as of the close of business on the last day of the calendar
month preceding such Distribution Date;
(x) for each of the preceding 12 calendar months, or all calendar months
since the Cut-off Date, whichever is less, the aggregate dollar amount of the
Scheduled Payments (A) due on all Outstanding Mortgage Loans on each of the
Due Dates in each such month and (B) delinquent 60 days or more on each of the
Due Dates in each such month;
(xi) the aggregate dollar amount of the Scheduled Payments (A) due on all
Outstanding Mortgage Loans on each of the Due Dates in the 12 calendar months
preceding such Distribution Date and (B) delinquent 60 days or more on each of
the Due Dates in the 12 calendar months preceding such Distribution Date;
(xii) with respect to any Mortgage Loan that became an REO Property
during the preceding calendar month, the loan number and Stated Principal
Balance of such Mortgage Loan as of the close of business on the Determination
Date preceding such Distribution Date and the date of acquisition thereof;
(xiii) the total number and principal balance of any REO Properties (and
market value, if available) as of the close of business on the Determination
Date preceding such Distribution Date;
(xiv) whether a Trigger Event has occurred and is continuing (including
the calculation of thereof and the aggregate outstanding balance of all
Mortgage Loans) tht are 60 days or more Delinquent;
(xv) the aggregate amount of Realized Losses incurred during the
preceding calendar month and aggregate Realized Losses through such
Distribution Date; and
(xvi) the amount of any Net Monthly Excess Cash Flow on such Distribution
Date and the allocation thereof to the Certificateholders, Applied Realized
Losses, Unpaid Interest Amounts and the Class OC Certificateholders, the
Subordinated Amount and Required Subordinated Amount.
(b) The Trustee's responsibility for disbursing the above information to
the Certificateholders is limited to the availability, timeliness and accuracy
of the information derived from the Master Servicer.
Within a reasonable period of time after the end of each calendar year,
the Trustee shall cause to be furnished to each Person who at any time during
the calendar year was a Certificateholder, a statement containing the
information set forth in clauses (a)(i), (a)(ii) and (a)(vii) of this Section
4.03 aggregated for such calendar year or applicable portion thereof during
which such Person was a Certificateholder. Such obligation of the Trustee
shall be deemed to have been satisfied to the extent that substantially
comparable information shall be provided by the Trustee pursuant to any
requirements of the Code as from time to time in effect.
Section 4.04. Determination of Pass-Through Rates for COFI Certificates.
The Pass-Through Rate for each Class of COFI Certificates for each
Interest Accrual Period after the initial Interest Accrual Period shall be
determined by the Trustee as provided below on the basis of the Index and the
applicable formulae appearing in footnotes corresponding to the COFI
Certificates in (1) to the table relating to the Certificates in the
Preliminary Statement.
Except as provided below, with respect to each Interest Accrual Period
following the initial Interest Accrual Period, the Trustee shall not later
than two Business Days following the publication of the applicable Index
determine the Pass-Through Rate at which interest shall accrue in respect of
the COFI Certificates during the related Interest Accrual Period.
Except as provided below, the Index to be used in determining the
respective Pass-Through Rates for the COFI Certificates for a particular
Interest Accrual Period shall be COFI for the second calendar month preceding
such Interest Accrual Period. If at the Outside Reference Date for any
Interest Accrual Period, COFI for the second calendar month preceding such
Interest Accrual Period has not been published, the Trustee shall use COFI for
the third calendar month preceding such Interest Accrual Period. If COFI for
neither the second nor third calendar months preceding any Interest Accrual
Period has been published on or before the related Outside Reference Date, the
Index for such Interest Accrual Period and for all subsequent Interest Accrual
Periods shall be the National Cost of Funds Index for the third calendar month
preceding such Interest Accrual Period (or the fourth preceding calendar month
if such National Cost of Funds Index for the third preceding calendar month
has not been published by such Outside Reference Date). In the event that the
National Cost of Funds Index for neither the third nor fourth calendar months
preceding an Interest Accrual Period has been published on or before the
related Outside Reference Date, then for such Interest Accrual Period and for
each succeeding Interest Accrual Period, the Index shall be LIBOR, determined
in the manner set forth below.
On each Interest Determination Date so long as the COFI Certificates are
outstanding and the applicable Index therefor is LIBOR, the Trustee shall
either (i) request each Reference Bank to inform the Trustee of the quotation
offered by its principal London office for making one-month United States
dollar deposits in leading banks in the London interbank market, as of 11:00
a.m. (London time) on such Interest Determination Date or (ii) in lieu of
making any such request, rely on such Reference Bank quotations that appear at
such time on the Reuters Screen LIBO Page (as defined in the International
Swap Dealers Association Inc. Code of Standard Wording, Assumptions and
Provisions for Swaps, 1986 Edition), to the extent available.
With respect to any Interest Accrual Period for which the applicable
Index is LIBOR, LIBOR for such Interest Accrual Period will be established by
the Trustee on the related Interest Determination Date as follows:
(a) If on any Interest Determination Date two or more Reference Banks
provide such offered quotations, LIBOR for the next Interest Accrual Period
shall be the arithmetic mean of such offered quotations (rounding such
arithmetic mean upwards if necessary to the nearest whole multiple of 1/32%).
(b) If on any Interest Determination Date only one or none of the Reference
Banks provides such offered quotations, LIBOR for the next Interest Accrual
Period shall be whichever is the higher of (i) LIBOR as determined on the
previous Interest Determination Date or (ii) the Reserve Interest Rate. The
"Reserve Interest Rate" shall be the rate per annum which the Trustee
determines to be either (i) the arithmetic mean (rounded upwards if necessary
to the nearest whole multiple of 1/32%) of the one-month United States dollar
lending rates that New York City banks selected by the Trustee are quoting, on
the relevant Interest Determination Date, to the principal London offices of
at least two of the Reference Banks to which such quotations are, in the
opinion of the Trustee, being so made, or (ii) in the event that the Trustee
can determine no such arithmetic mean, the lowest one-month United States
dollar lending rate which New York City banks selected by the Trustee are
quoting on such Interest Determination Date to leading European banks.
From such time as the applicable Index becomes LIBOR until all of the
COFI Certificates are paid in full, the Trustee will at all times retain at
least four Reference Banks for the purposes of determining LIBOR with respect
to each Interest Determination Date. The Master Servicer initially shall
designate the Reference Banks. Each "Reference Bank" shall be a leading bank
engaged in transactions in Eurodollar deposits in the international
Eurocurrency market, shall not control, be controlled by, or be under common
control with, the Trustee and shall have an established place of business in
London. If any such Reference Bank should be unwilling or unable to act as
such or if the Master Servicer should terminate its appointment as Reference
Bank, the Trustee shall promptly appoint or cause to be appointed another
Reference Bank. The Trustee shall have no liability or responsibility to any
Person for (i) the selection of any Reference Bank for purposes of determining
LIBOR or (ii) any inability to retain at least four Reference Banks which is
caused by circumstances beyond its reasonable control.
In determining LIBOR and any Pass-Through Rate for the COFI Certificates
or any Reserve Interest Rate, the Trustee may conclusively rely and shall be
protected in relying upon the offered quotations (whether written, oral or on
the Reuters Screen) from the Reference Banks or the New York City banks as to
LIBOR or the Reserve Interest Rate, as appropriate, in effect from time to
time. The Trustee shall not have any liability or responsibility to any Person
for (i) the Trustee's selection of New York City banks for purposes of
determining any Reserve Interest Rate or (ii) its inability, following a
good-faith reasonable effort, to obtain such quotations from the Reference
Banks or the New York City banks or to determine such arithmetic mean, all as
provided for in this Section 4.04.
The establishment of LIBOR and each Pass-Through Rate for the COFI
Certificates by the Trustee shall (in the absence of manifest error) be final,
conclusive and binding upon each Holder of a Certificate and the Trustee.
Section 4.05. Determination of Pass-Through Rates for LIBOR Certificates.
On each Interest Determination Date so long as the LIBOR Certificates are
outstanding, the Trustee shall either (i) request each Reference Bank to
inform the Trustee of the quotation offered by its principal London office for
making one-month United States dollar deposits to leading banks in the London
interbank market, as of 11:00 a.m. (London time) on such Interest
Determination Date or (ii) in lieu of making any such request, rely on such
Reference Bank quotations that appear at such time on the Reuters Screen LIBO
Page (as defined in the International Swap Dealers Association Inc. Code of
Standard Wording, Assumptions and provisions for Swaps, 1986 Edition), to the
extent available.
LIBOR for the next Interest Accrual Period will be established by the
Trustee on each Interest Determination Date as follows:
(a) If on any Interest Determination Date two or more Reference Banks
provide such offered quotations, LIBOR for the next Interest Accrual Period
shall be the arithmetic mean of such offered quotations (rounding such
arithmetic mean upwards if necessary to the nearest whole multiple of 1/32%).
(b) If on any Interest Determination Date only one or none of the
Reference Banks provides such offered quotations, LIBOR for the next Interest
Accrual Period shall be whichever is the higher of (i) LIBOR as determined on
the previous Interest Determination Date or (ii) the Reserve Interest Rate.
The "Reserve Interest Rate" shall be the rate per annum which the Trustee
determines to be either (i) the arithmetic mean (rounded upwards if necessary
to the nearest whole multiple of 1/32%) of the one-month United States dollar
lending rates that New York City banks selected by the Trustee are quoting, on
the relevant Interest Determination Date, to the principal London offices of
at least two of the Reference Banks to which such quotations are, in the
opinion of the Trustee, being so made, or (ii) in the event that the Trustee
can determine no such arithmetic mean, the lowest one-month United States
dollar lending rate which New York City banks selected by the Trustee are
quoting on such Interest Determination Date to leading European banks.
(c) If on any Interest Determination Date the trustee is required but is
unable to determine the Reserve Interest Rate in the manner provided in
paragraph (b) above, LIBOR shall be LIBOR as determined on the preceding
Interest Determination Date, or, in the case of the first Interest
Determination Date, the Initial LIBOR Rate.
Until all of the LIBOR Certificates are paid in full, the Trustee will at
all times retain at least four Reference Banks for the purpose of determining
LIBOR with respect to each Interest Determination Date. The Master Servicer
initially shall designate the Reference Banks. Each "Reference Bank" shall be
a leading bank engaged in transactions in Eurodollar deposits in the
international Eurocurrency market, shall not control, be controlled by, or be
under common control with, the Trustee and shall have an established place of
business in London. If any such Reference Bank should be unwilling or unable
to act as such or if the Master Servicer should terminate its appointment as
Reference Bank, the Trustee shall promptly appoint or cause to be appointed
another Reference Bank. The Trustee shall have no liability or responsibility
to any Person for (i) the selection of any Reference Bank for purposes of
determining LIBOR or (ii) any inability to retain at least four Reference
Banks which is caused by circumstances beyond its reasonable control.
The Pass-Through Rate for each Class of LIBOR Certificates for each
Interest Accrual Period shall be determined by the Trustee on each Interest
Determination Date so long as the LIBOR Certificates are outstanding on the
basis of LIBOR and the respective formulae appearing in footnotes
corresponding to the LIBOR Certificates in the table relating to the
Certificates in the Preliminary Statement.
In determining LIBOR, any Pass-Through Rate for the LIBOR Certificates or
any Reserve Interest Rate, the Trustee may conclusively rely and shall be
protected in relying upon the offered quotations (whether written, oral or on
the Reuters Screen) from the Reference Banks or the New York City banks as to
LIBOR or the Reserve Interest Rate, as appropriate, in effect from time to
time. The Trustee shall not have any liability or responsibility to any Person
for (i) the Trustee's selection of New York City banks for purposes of
determining any Reserve Interest Rate or (ii) its inability, following a
good-faith reasonable effort, to obtain such quotations from the Reference
Banks or the New York City banks or to determine such arithmetic mean, all as
provided for in this Section 4.05.
The establishment of LIBOR and each Pass-Through Rate for the LIBOR
Certificates by the Trustee shall (in the absence of manifest error) be final,
conclusive and binding upon each Holder of a Certificate and the Trustee.
<PAGE>
ARTICLE V
THE CERTIFICATES
Section 5.01. The Certificates.
The Certificates shall be substantially in the forms attached hereto as
exhibits. The Certificates shall be issuable in registered form, in the
minimum denominations, integral multiples in excess thereof (except that one
Certificate in each Class may be issued in a different amount which must be in
excess of the applicable minimum denomination) and aggregate denominations per
Class set forth in the Preliminary Statement.
Subject to Section 9.02 respecting the final distribution on the
Certificates, on each Distribution Date the Trustee shall make distributions
to each Certificateholder of record on the preceding Record Date either (x) by
wire transfer in immediately available funds to the account of such holder at
a bank or other entity having appropriate facilities therefor, if (i) such
Holder has so notified the Trustee at least five Business Days prior to the
related Record Date and (ii) such Holder shall hold (A) a Notional Amount
Certificate, (B) 100% of the Class Certificate Balance of any Class of
Certificates or (C) Certificates of any Class with aggregate principal
Denominations of not less than $1,000,000 or (y) by check mailed by first
class mail to such Certificateholder at the address of such holder appearing
in the Certificate Register.
The Certificates shall be executed by manual or facsimile signature on
behalf of the Trustee by an authorized officer. Certificates bearing the
manual or facsimile signatures of individuals who were, at the time such
signatures were affixed, authorized to sign on behalf of the Trustee shall
bind the Trustee, notwithstanding that such individuals or any of them have
ceased to be so authorized prior to the countersignature and delivery of any
such Certificates or did not hold such offices at the date of such
Certificate. No Certificate shall be entitled to any benefit under this
Agreement, or be valid for any purpose, unless countersigned by the Trustee by
manual signature, and such countersignature upon any Certificate shall be
conclusive evidence, and the only evidence, that such Certificate has been
duly executed and delivered hereunder. All Certificates shall be dated the
date of their countersignature. On the Closing Date, the Trustee shall
countersign the Certificates to be issued at the direction of the Depositor,
or any affiliate thereof.
The Depositor shall provide, or cause to be provided, to the Trustee on a
continuous basis, an adequate inventory of Certificates to facilitate
transfers.
Section 5.02. Certificate Register; Registration of Transfer and Exchange
of Certificates.
(a) The Trustee shall maintain, or cause to be maintained in accordance
with the provisions of Section 5.06, a Certificate Register for the Trust Fund
in which, subject to the provisions of subsections (b) and (c) below and to
such reasonable regulations as it may prescribe, the Trustee shall provide for
the registration of Certificates and of transfers and exchanges of
Certificates as herein provided. Upon surrender for registration of transfer
of any Certificate, the Trustee shall execute and deliver, in the name of the
designated transferee or transferees, one or more new Certificates of the same
Class and aggregate Percentage Interest.
At the option of a Certificateholder, Certificates may be exchanged for
other Certificates of the same Class in authorized denominations and
evidencing the same aggregate Percentage Interest upon surrender of the
Certificates to be exchanged at the office or agency of the Trustee. Whenever
any Certificates are so surrendered for exchange, the Trustee shall execute,
authenticate, and deliver the Certificates which the Certificateholder making
the exchange is entitled to receive. Every Certificate presented or
surrendered for registration of transfer or exchange shall be accompanied by a
written instrument of transfer in form satisfactory to the Trustee duly
executed by the holder thereof or his attorney duly authorized in writing.
No service charge to the Certificateholders shall be made for any
registration of transfer or exchange of Certificates, but payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer or exchange of Certificates may be required.
All Certificates surrendered for registration of transfer or exchange
shall be cancelled and subsequently destroyed by the Trustee in accordance
with the Trustee's customary procedures.
(b) No transfer of a Private Certificate shall be made unless such
transfer is made pursuant to an effective registration statement under the
Securities Act and any applicable state securities laws or is exempt from the
registration requirements under said Act and such state securities laws. In
the event that a transfer is to be made in reliance upon an exemption from the
Securities Act and such laws, in order to assure compliance with the
Securities Act and such laws, the Certificateholder desiring to effect such
transfer and such Certificateholder's prospective transferee shall each
certify to the Trustee in writing the facts surrounding the transfer in
substantially the form set forth in Exhibit J (the "Transferor Certificate")
and (i) deliver a letter in substantially the form of either Exhibit K (the
"Investment Letter") or Exhibit L (the "Rule 144A Letter") or (ii) there shall
be delivered to the Trustee at the expense of the transferor an Opinion of
Counsel that such transfer may be made pursuant to an exemption from the
Securities Act. The Depositor shall provide to any Holder of a Private
Certificate and any prospective transferee designated by any such Holder,
information regarding the related Certificates and the Mortgage Loans and such
other information as shall be necessary to satisfy the condition to
eligibility set forth in Rule 144A(d)(4) for transfer of any such Certificate
without registration thereof under the Securities Act pursuant to the
registration exemption provided by Rule 144A. The Trustee and the Master
Servicer shall cooperate with the Depositor in providing the Rule 144A
information referenced in the preceding sentence, including providing to the
Depositor such information regarding the Certificates, the Mortgage Loans and
other matters regarding the Trust Fund as the Depositor shall reasonably
request to meet its obligation under the preceding sentence. Each Holder of a
Private Certificate desiring to effect such transfer shall, and does hereby
agree to, indemnify the Trustee and the Depositor, the Seller and the Master
Servicer against any liability that may result if the transfer is not so
exempt or is not made in accordance with such federal and state laws.
No transfer of an ERISA-Restricted Certificate shall be made unless the
Trustee shall have received either (i) a representation from the transferee of
such Certificate acceptable to and in form and substance satisfactory to the
Trustee (in the event such Certificate is a Private Certificate or a Residual
Certificate, such requirement is satisfied only by the Trustee's receipt of a
representation letter from the transferee substantially in the form of Exhibit
K or Exhibit L), to the effect that such transferee is not an employee benefit
plan or arrangement subject to Section 406 of ERISA or a plan subject to
Section 4975 of the Code, nor a person acting on behalf of any such plan or
arrangement nor using the assets of any such plan or arrangement to effect
such transfer, or (ii) if the purchaser is an insurance company and the
ERISA-Restricted Certificate is a Residual Certificate or a Subordinated
Certificate, a representation that the purchaser is an insurance company which
is purchasing such Certificates with funds contained in an "insurance company
general account" (as such term is defined in Section V(e) of Prohibited
Transaction Class Exemption 95-60 ("PTCE 95-60")) and that the purchase and
holding of such Certificates are covered under PTCE 95-60 or (iii) in the case
of any such ERISA-Restricted Certificate presented for registration in the
name of an employee benefit plan subject to ERISA, or a plan or arrangement
subject to Section 4975 of the Code (or comparable provisions of any
subsequent enactments), or a trustee of any such plan or any other person
acting on behalf of any such plan or arrangement or using such plan's or
arrangement's assets, an Opinion of Counsel satisfactory to the Trustee, which
Opinion of Counsel shall not be an expense of either the Trustee or the Trust
Fund, addressed to the Trustee, to the effect that the purchase or holding of
such ERISA-Restricted Certificate will not result in the assets of the Trust
Fund being deemed to be "plan assets" and subject to the prohibited
transaction provisions of ERISA and the Code and will not subject the Trustee
to any obligation in addition to those expressly undertaken in this Agreement
or to any liability. For purposes of the preceding sentence, with respect to
an ERISA-Restricted Certificate that is not a Private Certificate or a
Residual Certificate, in the event the representation letter referred to in
the preceding sentence is not furnished, such representation shall be deemed
to have been made to the Trustee by the transferee's (including an initial
acquiror's) acceptance of the ERISA-Restricted Certificates. Notwithstanding
anything else to the contrary herein, any purported transfer of an
ERISA-Restricted Certificate to or on behalf of an employee benefit plan
subject to ERISA or to the Code without the delivery to the Trustee of an
Opinion of Counsel satisfactory to the Trustee as described above shall be
void and of no effect.
To the extent permitted under applicable law (including, but not limited
to, ERISA), the Trustee shall be under no liability to any Person for any
registration of transfer of any ERISA-Restricted Certificate that is in fact
not permitted by this Section 5.02(b) or for making any payments due on such
Certificate to the Holder thereof or taking any other action with respect to
such Holder under the provisions of this Agreement so long as the transfer was
registered by the Trustee in accordance with the foregoing requirements.
(c) Each Person who has or who acquires any Ownership Interest in a
Residual Certificate shall be deemed by the acceptance or acquisition of such
Ownership Interest to have agreed to be bound by the following provisions, and
the rights of each Person acquiring any Ownership Interest in a Residual
Certificate are expressly subject to the following provisions:
(i) Each Person holding or acquiring any Ownership Interest in
a Residual Certificate shall be a Permitted Transferee and shall
promptly notify the Trustee of any change or impending change in its
status as a Permitted Transferee.
(ii) No Ownership Interest in a Residual Certificate may be
registered on the Closing Date or thereafter transferred, and the
Trustee shall not register the Transfer of any Residual Certificate
unless, in addition to the certificates required to be delivered to
the Trustee under subparagraph (b) above, the Trustee shall have
been furnished with an affidavit (a "Transfer Affidavit") of the
initial owner or the proposed transferee in the form attached hereto
as Exhibit I.
(iii) Each Person holding or acquiring any Ownership Interest
in a Residual Certificate shall agree (A) to obtain a Transfer
Affidavit from any other Person to whom such Person attempts to
Transfer its Ownership Interest in a Residual Certificate, (B) to
obtain a Transfer Affidavit from any Person for whom such Person is
acting as nominee, trustee or agent in connection with any Transfer
of a Residual Certificate and (C) not to Transfer its Ownership
Interest in a Residual Certificate or to cause the Transfer of an
Ownership Interest in a Residual Certificate to any other Person if
it has actual knowledge that such Person is not a Permitted
Transferee.
(iv) Any attempted or purported Transfer of any Ownership
Interest in a Residual Certificate in violation of the provisions of
this Section 5.02(c) shall be absolutely null and void and shall
vest no rights in the purported Transferee. If any purported
transferee shall become a Holder of a Residual Certificate in
violation of the provisions of this Section 5.02(c), then the last
preceding Permitted Transferee shall be restored to all rights as
Holder thereof retroactive to the date of registration of Transfer
of such Residual Certificate. The Trustee shall be under no
liability to any Person for any registration of Transfer of a
Residual Certificate that is in fact not permitted by Section
5.02(b) and this Section 5.02(c) or for making any payments due on
such Certificate to the Holder thereof or taking any other action
with respect to such Holder under the provisions of this Agreement
so long as the Transfer was registered after receipt of the related
Transfer Affidavit, Transferor Certificate and either the Rule 144A
Letter or the Investment Letter. The Trustee shall be entitled but
not obligated to recover from any Holder of a Residual Certificate
that was in fact not a Permitted Transferee at the time it became a
Holder or, at such subsequent time as it became other than a
Permitted Transferee, all payments made on such Residual Certificate
at and after either such time. Any such payments so recovered by the
Trustee shall be paid and delivered by the Trustee to the last
preceding Permitted Transferee of such Certificate.
(v) The Depositor shall use its best efforts to make available,
upon receipt of written request from the Trustee, all information
necessary to compute any tax imposed under Section 860E(e) of the
Code as a result of a Transfer of an Ownership Interest in a
Residual Certificate to any Holder who is not a Permitted
Transferee.
The restrictions on Transfers of a Residual Certificate set forth in this
Section 5.02(c) shall cease to apply (and the applicable portions of the
legend on a Residual Certificate may be deleted) with respect to Transfers
occurring after delivery to the Trustee of an Opinion of Counsel, which
Opinion of Counsel shall not be an expense of the Trust Fund, the Trustee, the
Seller or the Master Servicer, to the effect that the elimination of such
restrictions will not cause the Trust Fund to fail to qualify as a REMIC at
any time that the Certificates are outstanding or result in the imposition of
any tax on the Trust Fund, a Certificateholder or another Person. Each Person
holding or acquiring any Ownership Interest in a Residual Certificate hereby
consents to any amendment of this Agreement which, based on an Opinion of
Counsel furnished to the Trustee, is reasonably necessary (a) to ensure that
the record ownership of, or any beneficial interest in, a Residual Certificate
is not transferred, directly or indirectly, to a Person that is not a
Permitted Transferee and (b) to provide for a means to compel the Transfer of
a Residual Certificate which is held by a Person that is not a Permitted
Transferee to a Holder that is a Permitted Transferee.
(d) The preparation and delivery of all certificates and opinions
referred to above in this Section 5.02 in connection with transfer shall be at
the expense of the parties to such transfers.
(e) Except as provided below, the Book-Entry Certificates shall at all
times remain registered in the name of the Depository or its nominee and at
all times: (i) registration of the Certificates may not be transferred by the
Trustee except to another Depository; (ii) the Depository shall maintain
book-entry records with respect to the Certificate Owners and with respect to
ownership and transfers of such Book-Entry Certificates; (iii) ownership and
transfers of registration of the Book-Entry Certificates on the books of the
Depository shall be governed by applicable rules established by the
Depository; (iv) the Depository may collect its usual and customary fees,
charges and expenses from its Depository Participants; (v) the Trustee shall
deal with the Depository, Depository Participants and indirect participating
firms as representatives of the Certificate Owners of the Book-Entry
Certificates for purposes of exercising the rights of holders under this
Agreement, and requests and directions for and votes of such representatives
shall not be deemed to be inconsistent if they are made with respect to
different Certificate Owners; and (vi) the Trustee may rely and shall be fully
protected in relying upon information furnished by the Depository with respect
to its Depository Participants and furnished by the Depository Participants
with respect to indirect participating firms and persons shown on the books of
such indirect participating firms as direct or indirect Certificate Owners.
All transfers by Certificate Owners of Book-Entry Certificates shall be
made in accordance with the procedures established by the Depository
Participant or brokerage firm representing such Certificate Owner. Each
Depository Participant shall only transfer Book-Entry Certificates of
Certificate Owners it represents or of brokerage firms for which it acts as
agent in accordance with the Depository's normal procedures.
If (x) (i) the Depository or the Depositor advises the Trustee in writing
that the Depository is no longer willing or able to properly discharge its
responsibilities as Depository, and (ii) the Trustee or the Depositor is
unable to locate a qualified successor, (y) the Depositor at its option
advises the Trustee in writing that it elects to terminate the book-entry
system through the Depository or (z) after the occurrence of an Event of
Default, Certificate Owners representing at least 51% of the Certificate
Balance of the Book-Entry Certificates together advise the Trustee and the
Depository through the Depository Participants in writing that the
continuation of a book-entry system through the Depository is no longer in the
best interests of the Certificate Owners, the Trustee shall notify all
Certificate Owners, through the Depository, of the occurrence of any such
event and of the availability of definitive, fully-registered Certificates
(the "Definitive Certificates") to Certificate Owners requesting the same.
Upon surrender to the Trustee of the related Class of Certificates by the
Depository, accompanied by the instructions from the Depository for
registration, the Trustee shall issue the Definitive Certificates. Neither the
Master Servicer, the Depositor nor the Trustee shall be liable for any delay
in delivery of such instruction and each may conclusively rely on, and shall
be protected in relying on, such instructions. The Master Servicer shall
provide the Trustee with an adequate inventory of certificates to facilitate
the issuance and transfer of Definitive Certificates. Upon the issuance of
Definitive Certificates all references herein to obligations imposed upon or
to be performed by the Depository shall be deemed to be imposed upon and
performed by the Trustee, to the extent applicable with respect to such
Definitive Certificates and the Trustee shall recognize the Holders of the
Definitive Certificates as Certificateholders hereunder; provided that the
Trustee shall not by virtue of its assumption of such obligations become
liable to any party for any act or failure to act of the Depository.
Section 5.03. Mutilated, Destroyed, Lost or Stolen Certificates.
If (a) any mutilated Certificate is surrendered to the Trustee, or the
Trustee receives evidence to its satisfaction of the destruction, loss or
theft of any Certificate and (b) there is delivered to the Master Servicer and
the Trustee such security or indemnity as may be required by them to hold each
of them harmless, then, in the absence of notice to the Trustee that such
Certificate has been acquired by a bona fide purchaser, the Trustee shall
execute, countersign and deliver, in exchange for or in lieu of any such
mutilated, destroyed, lost or stolen Certificate, a new Certificate of like
Class, tenor and Percentage Interest. In connection with the issuance of any
new Certificate under this Section 5.03, the Trustee may require the payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in relation thereto and any other expenses (including the fees and
expenses of the Trustee) connected therewith. Any replacement Certificate
issued pursuant to this Section 5.03 shall constitute complete and
indefeasible evidence of ownership, as if originally issued, whether or not
the lost, stolen or destroyed Certificate shall be found at any time.
Section 5.04. Persons Deemed Owners.
The Master Servicer, the Trustee and any agent of the Master Servicer or
the Trustee may treat the Person in whose name any Certificate is registered
as the owner of such Certificate for the purpose of receiving distributions as
provided in this Agreement and for all other purposes whatsoever, and neither
the Master Servicer, the Trustee nor any agent of the Master Servicer or the
Trustee shall be affected by any notice to the contrary.
Section 5.05. Access to List of Certificateholders' Names and Addresses.
If three or more Certificateholders (a) request such information in
writing from the Trustee, (b) state that such Certificateholders desire to
communicate with other Certificateholders with respect to their rights under
this Agreement or under the Certificates, and (c) provide a copy of the
communication which such Certificateholders propose to transmit, or if the
Depositor or Master Servicer shall request such information in writing from
the Trustee, then the Trustee shall, within ten Business Days after the
receipt of such request, provide the Depositor, the Master Servicer or such
Certificateholders at such recipients' expense the most recent list of the
Certificateholders of such Trust Fund held by the Trustee, if any. The
Depositor and every Certificateholder, by receiving and holding a Certificate,
agree that the Trustee shall not be held accountable by reason of the
disclosure of any such information as to the list of the Certificateholders
hereunder, regardless of the source from which such information was derived.
Section 5.06. Maintenance of Office or Agency.
The Trustee will maintain or cause to be maintained at its expense an
office or offices or agency or agencies in New York City where Certificates
may be surrendered for registration of transfer or exchange. The Trustee
initially designates its Corporate Trust Office for such purposes. The Trustee
will give prompt written notice to the Certificateholders of any change in
such location of any such office or agency.
<PAGE>
ARTICLE VI
THE DEPOSITOR AND THE MASTER SERVICER
Section 6.01. Respective Liabilities of the Depositor and the Master
Servicer.
The Depositor and the Master Servicer shall each be liable in accordance
herewith only to the extent of the obligations specifically and respectively
imposed upon and undertaken by them herein.
Section 6.02. Merger or Consolidation of the Depositor or the Master
Servicer.
The Depositor and the Master Servicer will each keep in full effect its
existence, rights and franchises as a corporation under the laws of the United
States or under the laws of one of the states thereof and will each obtain and
preserve its qualification to do business as a foreign corporation in each
jurisdiction in which such qualification is or shall be necessary to protect
the validity and enforceability of this Agreement, or any of the Mortgage
Loans and to perform its respective duties under this Agreement.
Any Person into which the Depositor or the Master Servicer may be merged
or consolidated, or any Person resulting from any merger or consolidation to
which the Depositor or the Master Servicer shall be a party, or any person
succeeding to the business of the Depositor or the Master Servicer, shall be
the successor of the Depositor or the Master Servicer, as the case may be,
hereunder, without the execution or filing of any paper or any further act on
the part of any of the parties hereto, anything herein to the contrary
notwithstanding; provided, however, that the successor or surviving Person to
the Master Servicer shall be qualified to sell mortgage loans to, and to
service mortgage loans on behalf of, FNMA or FHLMC.
Section 6.03. Limitation on Liability of the Depositor, the Seller, the
Master Servicer and Others.
None of the Depositor, the Seller, the Master Servicer or any of the
directors, officers, employees or agents of the Depositor, the Seller or the
Master Servicer shall be under any liability to the Certificateholders for any
action taken or for refraining from the taking of any action in good faith
pursuant to this Agreement, or for errors in judgment; provided, however, that
this provision shall not protect the Depositor, the Seller, the Master
Servicer or any such Person against any breach of representations or
warranties made by it herein or protect the Depositor, the Seller, the Master
Servicer or any such Person from any liability which would otherwise be
imposed by reasons of willful misfeasance, bad faith or gross negligence in
the performance of duties or by reason of reckless disregard of obligations
and duties hereunder. The Depositor, the Seller, the Master Servicer and any
director, officer, employee or agent of the Depositor, the Seller or the
Master Servicer may rely in good faith on any document of any kind prima facie
properly executed and submitted by any Person respecting any matters arising
hereunder. The Depositor, the Seller, the Master Servicer and any director,
officer, employee or agent of the Depositor, the Seller or the Master Servicer
shall be indemnified by the Trust Fund and held harmless against any loss,
liability or expense incurred in connection with any audit, controversy or
judicial proceeding relating to a governmental taxing authority or any legal
action relating to this Agreement or the Certificates, other than any loss,
liability or expense related to any specific Mortgage Loan or Mortgage Loans
(except as any such loss, liability or expense shall be otherwise reimbursable
pursuant to this Agreement) and any loss, liability or expense incurred by
reason of willful misfeasance, bad faith or gross negligence in the
performance of duties hereunder or by reason of reckless disregard of
obligations and duties hereunder. None of the Depositor, the Seller or the
Master Servicer shall be under any obligation to appear in, prosecute or
defend any legal action that is not incidental to its respective duties
hereunder and which in its opinion may involve it in any expense or liability;
provided, however, that any of the Depositor, the Seller or the Master
Servicer may in its discretion undertake any such action that it may deem
necessary or desirable in respect of this Agreement and the rights and duties
of the parties hereto and interests of the Trustee and the Certificateholders
hereunder. In such event, the legal expenses and costs of such action and any
liability resulting therefrom shall be expenses, costs and liabilities of the
Trust Fund, and the Depositor, the Seller and the Master Servicer shall be
entitled to be reimbursed therefor out of the Certificate Account.
Section 6.04. Limitation on Resignation of the Master Servicer.
The Master Servicer shall not resign from the obligations and duties
hereby imposed on it except (a) upon appointment of a successor servicer and
receipt by the Trustee of a letter from each Rating Agency that such a
resignation and appointment will not result in a downgrading of the rating of
any of the Certificates, or (b) upon determination that its duties hereunder
are no longer permissible under applicable law. Any such determination under
clause (b) permitting the resignation of the Master Servicer shall be
evidenced by an Opinion of Counsel to such effect delivered to the Trustee. No
such resignation shall become effective until the Trustee or a successor
master servicer shall have assumed the Master Servicer's responsibilities,
duties, liabilities and obligations hereunder.
<PAGE>
ARTICLE VII
DEFAULT
Section 7.01. Events of Default.
"Event of Default," wherever used herein, means any one of the following
events:
(i) any failure by the Master Servicer to deposit in the
Certificate Account or remit to the Trustee any payment required to
be made under the terms of this Agreement, which failure shall
continue unremedied for five days after the date upon which written
notice of such failure shall have been given to the Master Servicer
by the Trustee or the Depositor or to the Master Servicer and the
Trustee by the Holders of Certificates having not less than 25% of
the Voting Rights evidenced by the Certificates; or
(ii) any failure by the Master Servicer to observe or perform
in any material respect any other of the covenants or agreements on
the part of the Master Servicer contained in this Agreement that
materially affects the rights of Certificateholders, which failure
shall continue unremedied for a period of 60 days after the date on
which written notice of such failure shall have been given to the
Master Servicer by the Trustee or the Depositor, or to the Master
Servicer and the Trustee by the Holders of Certificates evidencing
not less than 25% of the Voting Rights evidenced by the
Certificates; or
(iii) a decree or order of a court or agency or supervisory
authority having jurisdiction in the premises for the appointment of
a receiver or liquidator in any insolvency, readjustment of debt,
marshalling of assets and liabilities or similar proceedings, or for
the winding-up or liquidation of its affairs, shall have been
entered against the Master Servicer and such decree or order shall
have remained in force undischarged or unstayed for a period of 60
consecutive days; or
(iv) the Master Servicer shall consent to the appointment of a
receiver or liquidator in any insolvency, readjustment of debt,
marshalling of assets and liabilities or similar proceedings of or
relating to the Master Servicer or all or substantially all of the
property of the Master Servicer; or
(v) the Master Servicer shall admit in writing its inability to
pay its debts generally as they become due, file a petition to take
advantage of, or commence a voluntary case under, any applicable
insolvency or reorganization statute, make an assignment for the
benefit of its creditors, or voluntarily suspend payment of its
obligations.
If an Event of Default described in clauses (i) to (v) of this Section
7.01 shall occur, then, and in each and every such case, so long as such Event
of Default shall not have been remedied, the Trustee may, or at the direction
of the Holders of Certificates evidencing not less than 66K% of the Voting
Rights evidenced by the Certificates, the Trustee shall by notice in writing
to the Master Servicer (with a copy to each Rating Agency), terminate all of
the rights and obligations of the Master Servicer under this Agreement and in
and to the Mortgage Loans and the proceeds thereof, other than its rights as a
Certificateholder hereunder. On and after the receipt by the Master Servicer
of such written notice, all authority and power of the Master Servicer
hereunder, whether with respect to the Mortgage Loans or otherwise, shall pass
to and be vested in the Trustee. The Trustee shall make any Advance which the
Master Servicer failed to make subject to Section 3.04, whether or not the
obligations of the Master Servicer have been terminated pursuant to this
Section. The Trustee is hereby authorized and empowered to execute and
deliver, on behalf of the Master Servicer, as attorney-in-fact or otherwise,
any and all documents and other instruments, and to do or accomplish all other
acts or things necessary or appropriate to effect the purposes of such notice
of termination, whether to complete the transfer and endorsement or assignment
of the Mortgage Loans and related documents, or otherwise. Unless expressly
provided in such written notice, no such termination shall affect any
obligation of the Master Servicer to pay amounts owed pursuant to Article
VIII. The Master Servicer agrees to cooperate with the Trustee in effecting
the termination of the Master Servicer's responsibilities and rights
hereunder, including, without limitation, the transfer to the Trustee of all
cash amounts which shall at the time be credited to the Certificate Account,
or thereafter be received with respect to the Mortgage Loans.
Notwithstanding any termination of the activities of the Master Servicer
hereunder, the Master Servicer shall be entitled to receive, out of any late
collection of a Scheduled Payment on a Mortgage Loan which was due prior to
the notice terminating such Master Servicer's rights and obligations as Master
Servicer hereunder and received after such notice, that portion thereof to
which such Master Servicer would have been entitled pursuant to Sections
3.11(a)(i) through (viii), and any other amounts payable to such Master
Servicer hereunder the entitlement to which arose prior to the termination of
its activities hereunder.
Section 1.02. Trustee to Act; Appointment of Successor.
On and after the time the Master Servicer receives a notice of
termination pursuant to Section 7.01, the Trustee shall, subject to and to the
extent provided in Section 3.07, be the successor to the Master Servicer in
its capacity as master servicer under this Agreement and the transactions set
forth or provided for herein and shall be subject to all the responsibilities,
duties and liabilities relating thereto placed on the Master Servicer by the
terms and provisions hereof and applicable law including the obligation to
make Advances pursuant to Section 4.01. As compensation therefor, the Trustee
shall be entitled to all funds relating to the Mortgage Loans that the Master
Servicer would have been entitled to charge to the Certificate Account or
Distribution Account if the Master Servicer had continued to act hereunder.
Notwithstanding the foregoing, if the Trustee has become the successor to the
Master Servicer in accordance with Section 7.01, the Trustee may, if it shall
be unwilling to so act, or shall, if it is prohibited by applicable law from
making Advances pursuant to Section 4.01 or if it is otherwise unable to so
act, appoint, or petition a court of competent jurisdiction to appoint, any
established mortgage loan servicing institution the appointment of which does
not adversely affect the then current rating of the Certificates, by each
Rating Agency, as the successor to the Master Servicer hereunder in the
assumption of all or any part of the responsibilities, duties or liabilities
of the Master Servicer hereunder. Any successor to the Master Servicer shall
be an institution which is a FNMA and FHLMC approved seller/servicer in good
standing, which has a net worth of at least $15,000,000, which is willing to
service the Mortgage Loans and which executes and delivers to the Depositor
and the Trustee an agreement accepting such delegation and assignment,
containing an assumption by such Person of the rights, powers, duties,
responsibilities, obligations and liabilities of the Master Servicer (other
than liabilities of the Master Servicer under Section 6.03 incurred prior to
termination of the Master Servicer under Section 7.01), with like effect as if
originally named as a party to this Agreement; provided that each Rating
Agency acknowledges that its rating of the Certificates in effect immediately
prior to such assignment and delegation will not be qualified or reduced as a
result of such assignment and delegation. Pending appointment of a successor
to the Master Servicer hereunder, the Trustee, unless the Trustee is
prohibited by law from so acting, shall, subject to Section 3.07, act in such
capacity as hereinabove provided. In connection with such appointment and
assumption, the Trustee may make such arrangements for the compensation of
such successor out of payments on Mortgage Loans as it and such successor
shall agree; provided, however, that no such compensation shall be in excess
of the Master Servicing Fee permitted the Master Servicer hereunder. The
Trustee and such successor shall take such action, consistent with this
Agreement, as shall be necessary to effectuate any such succession. Neither
the Trustee nor any other successor master servicer shall be deemed to be in
default hereunder by reason of any failure to make, or any delay in making,
any distribution hereunder or any portion thereof or any failure to perform,
or any delay in performing, any duties or responsibilities hereunder, in
either case caused by the failure of the Master Servicer to deliver or
provide, or any delay in delivering or providing, any cash, information,
documents or records to it.
Any successor to the Master Servicer as master servicer shall give notice
to the Mortgagors of such change of servicer and shall, during the term of its
service as master servicer, maintain in force the policy or policies that the
Master Servicer is required to maintain pursuant to Section 6.05.
Section 1.03. Notification to Certificateholders.
(a) Upon any termination of or appointment of a successor to the Master
Servicer, the Trustee shall give prompt written notice thereof to
Certificateholders and to each Rating Agency.
(b) Within 60 days after the occurrence of any Event of Default, the
Trustee shall transmit by mail to all Certificateholders notice of each such
Event of Default hereunder known to the Trustee, unless such Event of Default
shall have been cured or waived.
<PAGE>
ARTICLE VIII
CONCERNING THE TRUSTEE
Section 8.01. Duties of the Trustee.
The Trustee, prior to the occurrence of an Event of Default and after the
curing of all Events of Default that may have occurred, shall undertake to
perform such duties and only such duties as are specifically set forth in this
Agreement. In case an Event of Default has occurred and remains uncured, the
Trustee shall exercise such of the rights and powers vested in it by this
Agreement, and use the same degree of care and skill in their exercise as a
prudent person would exercise or use under the circumstances in the conduct of
such person's own affairs.
The Trustee, upon receipt of all resolutions, certificates, statements,
opinions, reports, documents, orders or other instruments furnished to the
Trustee that are specifically required to be furnished pursuant to any
provision of this Agreement shall examine them to determine whether they are
in the form required by this Agreement; provided, however, that the Trustee
shall not be responsible for the accuracy or content of any such resolution,
certificate, statement, opinion, report, document, order or other instrument.
No provision of this Agreement shall be construed to relieve the Trustee
from liability for its own negligent action, its own negligent failure to act
or its own willful misconduct; provided, however, that:
(i) unless an Event of Default known to the Trustee shall have
occurred and be continuing, the duties and obligations of the
Trustee shall be determined solely by the express provisions of this
Agreement, the Trustee shall not be liable except for the
performance of such duties and obligations as are specifically set
forth in this Agreement, no implied covenants or obligations shall
be read into this Agreement against the Trustee and the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon any certificates
or opinions furnished to the Trustee and conforming to the
requirements of this Agreement which it believed in good faith to be
genuine and to have been duly executed by the proper authorities
respecting any matters arising hereunder;
(ii) the Trustee shall not be liable for an error of judgment
made in good faith by a Responsible Officer or Responsible Officers
of the Trustee, unless it shall be finally proven that the Trustee
was negligent in ascertaining the pertinent facts; and
(iii) the Trustee shall not be liable with respect to any
action taken, suffered or omitted to be taken by it in good faith in
accordance with the direction of Holders of Certificates evidencing
not less than 25% of the Voting Rights of Certificates relating to
the time, method and place of conducting any proceeding for any
remedy available to the Trustee, or exercising any trust or power
conferred upon the Trustee under this Agreement.
Section 8.02. Certain Matters Affecting the Trustee.
Except as otherwise provided in Section 8.01:
(i) the Trustee may request and rely upon and shall be
protected in acting or refraining from acting upon any resolution,
Officers' Certificate, certificate of auditors or any other
certificate, statement, instrument, opinion, report, notice,
request, consent, order, appraisal, bond or other paper or document
believed by it to be genuine and to have been signed or presented by
the proper party or parties and the Trustee shall have no
responsibility to ascertain or confirm the genuineness of any
signature of any such party or parties;
(ii) the Trustee may consult with counsel, financial advisers
or accountants and the advice of any such counsel, financial
advisers or accountants and any Opinion of Counsel shall be full and
complete authorization and protection in respect of any action taken
or suffered or omitted by it hereunder in good faith and in
accordance with such Opinion of Counsel;
(iii) the Trustee shall not be liable for any action taken,
suffered or omitted by it in good faith and believed by it to be
authorized or within the discretion or rights or powers conferred
upon it by this Agreement;
(iv) the Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, consent,
order, approval, bond or other paper or document, unless requested
in writing so to do by Holders of Certificates evidencing not less
than 25% of the Voting Rights allocated to each Class of
Certificates;
(v) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or
through agents, accountants or attorneys;
(vi) the Trustee shall not be required to risk or expend its
own funds or otherwise incur any financial liability in the
performance of any of its duties or in the exercise of any of its
rights or powers hereunder if it shall have reasonable grounds for
believing that repayment of such funds or adequate indemnity against
such risk or liability is not assured to it;
(vii) the Trustee shall not be liable for any loss on any
investment of funds pursuant to this Agreement (other than as issuer
of the investment security);
(viii) the Trustee shall not be deemed to have knowledge of an
Event of Default until a Responsible Officer of the Trustee shall
have received written notice thereof; and
(ix) the Trustee shall be under no obligation to exercise any
of the trusts, rights or powers vested in it by this Agreement or to
institute, conduct or defend any litigation hereunder or in relation
hereto at the request, order or direction of any of the
Certificateholders, pursuant to the provisions of this Agreement,
unless such Certificateholders shall have offered to the Trustee
reasonable security or indemnity satisfactory to the Trustee against
the costs, expenses and liabilities which may be incurred therein or
thereby.
Section 8.03. Trustee Not Liable for Certificates or Mortgage Loans.
The recitals contained herein and in the Certificates shall be taken as
the statements of the Depositor or the Seller, as the case may be, and the
Trustee assumes no responsibility for their correctness. The Trustee makes no
representations as to the validity or sufficiency of this Agreement or of the
Certificates or of any Mortgage Loan or related document other than with
respect to the Trustee's execution and countersignature of the Certificates.
The Trustee shall not be accountable for the use or application by the
Depositor or the Master Servicer of any funds paid to the Depositor or the
Master Servicer in respect of the Mortgage Loans or deposited in or withdrawn
from the Certificate Account by the Depositor or the Master Servicer.
Section 8.04. Trustee May Own Certificates.
The Trustee in its individual or any other capacity may become the owner
or pledgee of Certificates with the same rights as it would have if it were
not the Trustee.
Section 8.05. Trustee's Fees and Expenses.
The Trustee, as compensation for its activities hereunder, shall be
entitled to withdraw from the Distribution Account on each Distribution Date
an amount equal to the Trustee Fee for such Distribution Date. The Trustee and
any director, officer, employee or agent of the Trustee shall be indemnified
by the Master Servicer and held harmless against any loss, liability or
expense (including reasonable attorney's fees) (i) incurred in connection with
any claim or legal action relating to (a) this Agreement, (b) the
Certificates, or (c) the performance of any of the Trustee's duties hereunder,
other than any loss, liability or expense incurred by reason of willful
misfeasance, bad faith or negligence in the performance of any of the
Trustee's duties hereunder or incurred by reason of any action of the Trustee
taken at the direction of the Certificateholders and (ii) resulting from any
error in any tax or information return prepared by the Master Servicer. Such
indemnity shall survive the termination of this Agreement or the resignation
or removal of the Trustee hereunder. Without limiting the foregoing, the
Master Servicer covenants and agrees, except as otherwise agreed upon in
writing by the Depositor and the Trustee, and except for any such expense,
disbursement or advance as may arise from the Trustee's negligence, bad faith
or willful misconduct, to pay or reimburse the Trustee, for all reasonable
expenses, disbursements and advances incurred or made by the Trustee in
accordance with any of the provisions of this Agreement with respect to (A)
the reasonable compensation and the expenses and disbursements of its counsel
not associated with the closing of the issuance of the Certificates, (B) the
reasonable compensation, expenses and disbursements of any accountant,
engineer or appraiser that is not regularly employed by the Trustee, to the
extent that the Trustee must engage such persons to perform acts or services
hereunder and (C) printing and engraving expenses in connection with preparing
any Definitive Certificates. Except as otherwise provided herein, the Trustee
shall not be entitled to payment or reimbursement for any routine ongoing
expenses incurred by the Trustee in the ordinary course of its duties as
Trustee, Registrar, Tax Matters Person or Paying Agent hereunder or for any
other expenses.
Section 8.06. Eligibility Requirements for the Trustee.
The Trustee hereunder shall at all times be a corporation or association
organized and doing business under the laws of a state or the United States of
America, authorized under such laws to exercise corporate trust powers, having
a combined capital and surplus of at least $50,000,000, subject to supervision
or examination by federal or state authority and with a credit rating which
would not cause either of the Rating Agencies to reduce their respective then
current ratings of the Certificates (or having provided such security from
time to time as is sufficient to avoid such reduction) as evidenced in writing
by each Rating Agency. If such corporation or association publishes reports of
condition at least annually, pursuant to law or to the requirements of the
aforesaid supervising or examining authority, then for the purposes of this
Section 8.06 the combined capital and surplus of such corporation or
association shall be deemed to be its combined capital and surplus as set
forth in its most recent report of condition so published. In case at any time
the Trustee shall cease to be eligible in accordance with the provisions of
this Section 8.06, the Trustee shall resign immediately in the manner and with
the effect specified in Section 8.07. The entity serving as Trustee may have
normal banking and trust relationships with the Depositor and its affiliates
or the Master Servicer and its affiliates; provided, however, that such entity
cannot be an affiliate of the Seller, the Depositor or the Master Servicer
other than the Trustee in its role as successor to the Master Servicer.
Section 8.07. Resignation and Removal of the Trustee.
The Trustee may at any time resign and be discharged from the trusts
hereby created by giving written notice of resignation to the Depositor, the
Master Servicer and each Rating Agency not less than 60 days before the date
specified in such notice, when, subject to Section 8.08, such resignation is
to take effect, and acceptance by a successor trustee in accordance with
Section 8.08 meeting the qualifications set forth in Section 8.06. If no
successor trustee meeting such qualifications shall have been so appointed and
have accepted appointment within 30 days after the giving of such notice or
resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor trustee.
If at any time the Trustee shall cease to be eligible in accordance with
the provisions of Section 8.06 and shall fail to resign after written request
thereto by the Depositor, or if at any time the Trustee shall become incapable
of acting, or shall be adjudged as bankrupt or insolvent, or a receiver of the
Trustee or of its property shall be appointed, or any public officer shall
take charge or control of the Trustee or of its property or affairs for the
purpose of rehabilitation, conservation or liquidation, or a tax is imposed
with respect to the Trust Fund by any state in which the Trustee or the Trust
Fund is located and the imposition of such tax would be avoided by the
appointment of a different trustee, then the Depositor or the Master Servicer
may remove the Trustee and appoint a successor trustee by written instrument,
in triplicate, one copy of which shall be delivered to the Trustee, one copy
to the Master Servicer and one copy to the successor trustee.
The Holders of Certificates entitled to at least 51% of the Voting Rights
may at any time remove the Trustee and appoint a successor trustee by written
instrument or instruments, in triplicate, signed by such Holders or their
attorneys-in-fact duly authorized, one complete set of which shall be
delivered by the successor Trustee to the Master Servicer, one complete set to
the Trustee so removed and one complete set to the successor so appointed.
Notice of any removal of the Trustee shall be given to each Rating Agency by
the successor trustee.
Any resignation or removal of the Trustee and appointment of a successor
trustee pursuant to any of the provisions of this Section 8.07 shall become
effective upon acceptance of appointment by the successor trustee as provided
in Section 8.08.
Section 8.08. Successor Trustee.
Any successor trustee appointed as provided in Section 8.07 shall
execute, acknowledge and deliver to the Depositor and to its predecessor
trustee and the Master Servicer an instrument accepting such appointment
hereunder and thereupon the resignation or removal of the predecessor trustee
shall become effective and such successor trustee, without any further act,
deed or conveyance, shall become fully vested with all the rights, powers,
duties and obligations of its predecessor hereunder, with the like effect as
if originally named as trustee herein. The Depositor, the Master Servicer and
the predecessor trustee shall execute and deliver such instruments and do such
other things as may reasonably be required for more fully and certainly
vesting and confirming in the successor trustee all such rights, powers,
duties, and obligations.
No successor trustee shall accept appointment as provided in this Section
8.08 unless at the time of such acceptance such successor trustee shall be
eligible under the provisions of Section 8.06 and its appointment shall not
adversely affect the then current rating of the Certificates.
Upon acceptance of appointment by a successor trustee as provided in this
Section 8.08, the Depositor shall mail notice of the succession of such
trustee hereunder to all Holders of Certificates. If the Depositor fails to
mail such notice within 10 days after acceptance of appointment by the
successor trustee, the successor trustee shall cause such notice to be mailed
at the expense of the Depositor.
Section 8.09. Merger or Consolidation of the Trustee.
Any corporation into which the Trustee may be merged or converted or with
which it may be consolidated or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to the business of the Trustee, shall be the successor
of the Trustee hereunder, provided that such corporation shall be eligible
under the provisions of Section 8.06 without the execution or filing of any
paper or further act on the part of any of the parties hereto, anything herein
to the contrary notwithstanding.
Section 8.10. Appointment of Co-Trustee or Separate Trustee.
Notwithstanding any other provisions of this Agreement, at any time, for
the purpose of meeting any legal requirements of any jurisdiction in which any
part of the Trust Fund or property securing any Mortgage Note may at the time
be located, the Master Servicer and the Trustee acting jointly shall have the
power and shall execute and deliver all instruments to appoint one or more
Persons approved by the Trustee to act as co-trustee or co-trustees jointly
with the Trustee, or separate trustee or separate trustees, of all or any part
of the Trust Fund, and to vest in such Person or Persons, in such capacity and
for the benefit of the Certificateholders, such title to the Trust Fund or any
part thereof, whichever is applicable, and, subject to the other provisions of
this Section 8.10, such powers, duties, obligations, rights and trusts as the
Master Servicer and the Trustee may consider necessary or desirable. If the
Master Servicer shall not have joined in such appointment within 15 days after
the receipt by it of a request to do so, or in the case an Event of Default
shall have occurred and be continuing, the Trustee alone shall have the power
to make such appointment. No co-trustee or separate trustee hereunder shall be
required to meet the terms of eligibility as a successor trustee under Section
8.06 and no notice to Certificateholders of the appointment of any co-trustee
or separate trustee shall be required under Section 8.08.
Every separate trustee and co-trustee shall, to the extent permitted by
law, be appointed and act subject to the following provisions and conditions:
(i) To the extent necessary to effectuate the purposes of this
Section 8.10, all rights, powers, duties and obligations conferred
or imposed upon the Trustee, except for the obligation of the
Trustee under this Agreement to advance funds on behalf of the
Master Servicer, shall be conferred or imposed upon and exercised or
performed by the Trustee and such separate trustee or co-trustee
jointly (it being understood that such separate trustee or
co-trustee is not authorized to act separately without the Trustee
joining in such act), except to the extent that under any law of any
jurisdiction in which any particular act or acts are to be performed
(whether as Trustee hereunder or as successor to the Master Servicer
hereunder), the Trustee shall be incompetent or unqualified to
perform such act or acts, in which event such rights, powers, duties
and obligations (including the holding of title to the applicable
Trust Fund or any portion thereof in any such jurisdiction) shall be
exercised and performed singly by such separate trustee or
co-trustee, but solely at the direction of the Trustee;
(ii) No trustee hereunder shall be held personally liable by
reason of any act or omission of any other trustee hereunder and
such appointment shall not, and shall not be deemed to, constitute
any such separate trustee or co-trustee as agent of the Trustee;
(iii) The Trustee may at any time accept the resignation of or
remove any separate trustee or co-trustee; and
(iv) The Master Servicer, and not the Trustee, shall be liable
for the payment of reasonable compensation, reimbursement and
indemnification to any such separate trustee or co-trustee.
Any notice, request or other writing given to the Trustee shall be deemed
to have been given to each of the separate trustees and co-trustees, when and
as effectively as if given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to this Agreement and the
conditions of this Article VIII. Each separate trustee and co-trustee, upon
its acceptance of the trusts conferred, shall be vested with the estates or
property specified in its instrument of appointment, either jointly with the
Trustee or separately, as may be provided therein, subject to all the
provisions of this Agreement, specifically including every provision of this
Agreement relating to the conduct of, affecting the liability of, or affording
protection to, the Trustee. Every such instrument shall be filed with the
Trustee and a copy thereof given to the Master Servicer and the Depositor.
Any separate trustee or co-trustee may, at any time, constitute the
Trustee its agent or attorney-in-fact, with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all of its
estates, properties, rights, remedies and trusts shall vest in and be
exercised by the Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee.
Section 8.11. Tax Matters.
It is intended that the assets with respect to which any REMIC election
pertaining to the Trust Fund is to be made, as set forth in the Preliminary
Statement, shall constitute, and that the conduct of matters relating to such
assets shall be such as to qualify such assets as, a "real estate mortgage
investment conduit" as defined in and in accordance with the REMIC Provisions.
In furtherance of such intention, the Trustee covenants and agrees that it
shall act as agent (and the Trustee is hereby appointed to act as agent) on
behalf of the Trust Fund and that in such capacity it shall: (a) prepare and
file, or cause to be prepared and filed, in a timely manner, a U.S. Real
Estate Mortgage Investment Conduit Income Tax Return (Form 1066 or any
successor form adopted by the Internal Revenue Service) and prepare and file
or cause to be prepared and filed with the Internal Revenue Service and
applicable state or local tax authorities income tax or information returns
for each taxable year with respect to the Trust Fund, containing such
information and at the times and in the manner as may be required by the Code
or state or local tax laws, regulations, or rules, and furnish or cause to be
furnished to Certificateholders the schedules, statements or information at
such times and in such manner as may be required thereby; (b) within thirty
days of the Closing Date, furnish or cause to be furnished to the Internal
Revenue Service, on Forms 8811 or as otherwise may be required by the Code,
the name, title, address, and telephone number of the person that the holders
of the Certificates may contact for tax information relating thereto, together
with such additional information as may be required by such Form, and update
such information at the time or times in the manner required by the Code; (c)
make or cause to be made an election that such assets be treated as a REMIC on
the federal tax return for its first taxable year (and, if necessary, under
applicable state law); (d) prepare and forward, or cause to be prepared and
forwarded, to the Certificateholders and to the Internal Revenue Service and,
if necessary, state tax authorities, all information returns and reports as
and when required to be provided to them in accordance with the REMIC
Provisions, including without limitation, the calculation of any original
issue discount using the Prepayment Assumption; (e) provide information
necessary for the computation of tax imposed on the transfer of a Residual
Certificate to a Person that is not a Permitted Transferee, or an agent
(including a broker, nominee or other middleman) of a Non-Permitted
Transferee, or a pass-through entity in which a Non-Permitted Transferee is
the record holder of an interest (the reasonable cost of computing and
furnishing such information may be charged to the Person liable for such tax);
(f) to the extent that they are under its control, conduct matters relating to
such assets at all times that any Certificates are outstanding so as to
maintain the status as a REMIC under the REMIC Provisions; (g) not knowingly
or intentionally take any action or omit to take any action that would cause
the termination of the REMIC status; (h) pay, from the sources specified in
the last paragraph of this Section 8.11, the amount of any federal or state
tax, including prohibited transaction taxes as described below, imposed on the
REMIC prior to its termination when and as the same shall be due and payable
(but such obligation shall not prevent the Trustee or any other appropriate
Person from contesting any such tax in appropriate proceedings and shall not
prevent the Trustee from withholding payment of such tax, if permitted by law,
pending the outcome of such proceedings); (i) ensure that federal, state or
local income tax or information returns shall be signed by the Trustee or such
other person as may be required to sign such returns by the Code or state or
local laws, regulations or rules; (j) maintain records relating to the REMIC,
including but not limited to the income, expenses, assets and liabilities
thereof and the fair market value and adjusted basis of the assets determined
at such intervals as may be required by the Code, as may be necessary to
prepare the foregoing returns, schedules, statements or information; and (k)
as and when necessary and appropriate, represent the REMIC in any
administrative or judicial proceedings relating to an examination or audit by
any governmental taxing authority, request an administrative adjustment as to
any taxable year of the REMIC, enter into settlement agreements with any
governmental taxing agency, extend any statute of limitations relating to any
tax item of the REMIC, and otherwise act on behalf of the REMIC in relation to
any tax matter or controversy involving it.
In order to enable the Trustee to perform its duties as set forth herein,
the Depositor shall provide, or cause to be provided, to the Trustee within
ten (10) days after the Closing Date all information or data that the Trustee
requests in writing and determines to be relevant for tax purposes to the
valuations and offering prices of the Certificates, including, without
limitation, the price, yield, prepayment assumption and projected cash flows
of the Certificates and the Mortgage Loans. Thereafter, the Depositor shall
provide to the Trustee promptly upon written request therefor any such
additional information or data that the Trustee may, from time to time,
reasonably request in order to enable the Trustee to perform its duties as set
forth herein. The Depositor hereby indemnifies the Trustee for any losses,
liabilities, damages, claims or expenses of the Trustee arising from any
errors or miscalculations of the Trustee that result from any failure of the
Depositor to provide, or to cause to be provided, accurate information or data
to the Trustee on a timely basis.
In the event that any tax is imposed on "prohibited transactions" of the
REMIC as defined in Section 860F(a)(2) of the Code, on the "net income from
foreclosure property" of the REMIC as defined in Section 860G(c) of the Code,
on any contribution to the REMIC after the Startup Day pursuant to Section
860G(d) of the Code, or any other tax is imposed, including, without
limitation, any minimum tax imposed upon the REMIC pursuant to Sections 23153
and 24874 of the California Revenue and Taxation Code, if not paid as
otherwise provided for herein, such tax shall be paid by (i) the Trustee, if
any such other tax arises out of or results from a breach by the Trustee of
any of its obligations under this Agreement, (ii) the Master Servicer or the
Seller, in the case of any such minimum tax, if such tax arises out of or
results from a breach by the Master Servicer or Seller of any of their
obligations under this Agreement or (iii) the Seller, if any such tax arises
out of or results from the Seller's obligation to repurchase a Mortgage Loan
pursuant to Section 2.02 or 2.03 or (iv) in all other cases, or in the event
that the Trustee, the Master Servicer or the Seller fails to honor its
obligations under the preceding clauses (i), (ii) or (iii), any such tax will
be paid with amounts otherwise to be distributed to the Certificateholders, as
provided in Section 3.11(b).
Section 8.12. Periodic Filings.
Pursuant to written instructions from the Depositor, the Trustee shall
prepare, execute and file all periodic reports required under the Securities
Exchange Act of 1934 in conformity with the terms of the relief granted to the
Depositor in CWMBS, Inc. (February 3, 1994), a copy of which has been supplied
to the Trustee by the Issuer. In connection with the preparation and filing of
such periodic reports, the Depositor and the Master Servicer shall timely
provide to the Trustee all material information available to them which is
required to be included in such reports and not known to them to be in the
possession of the Trustee and such other information as the Trustee reasonably
may request from either of them and otherwise reasonably shall cooperate with
the Trustee. The Trustee shall have no liability with respect to any failure
to properly prepare or file such periodic reports resulting from or relating
to the Trustee's inability or failure to obtain any information not resulting
from its own negligence or willful misconduct.
<PAGE>
ARTICLE IX
TERMINATION
Section 9.01. Termination upon Liquidation or Purchase of all Mortgage
Loans.
Subject to Section 9.03, the obligations and responsibilities of the
Depositor, the Master Servicer and the Trustee created hereby with respect to
the Trust Fund shall terminate upon the earlier of (a) the purchase by the
Master Servicer of all Mortgage Loans (and REO Properties) remaining in the
Trust Fund at the price equal to the sum of (i) 100% of the Stated Principal
Balance of each Mortgage Loan (other than in respect of REO Property) plus one
month's accrued interest thereon at the applicable Adjusted Mortgage Rate and
(ii) the lesser of (x) the appraised value of any REO Property as determined
by the higher of two appraisals completed by two independent appraisers
selected by the Master Servicer at the expense of the Master Servicer and (y)
the Stated Principal Balance of each Mortgage Loan related to any REO
Property, in each case plus accrued and unpaid interest thereon at the
applicable Adjusted Mortgage Rate and (b) the later of (i) the maturity or
other liquidation (or any Advance with respect thereto) of the last Mortgage
Loan remaining in the Trust Fund and the disposition of all REO Property and
(ii) the distribution to Certificateholders of all amounts required to be
distributed to them pursuant to this Agreement. In no event shall the trusts
created hereby continue beyond the earlier of (i) the expiration of 21 years
from the death of the survivor of the descendants of Joseph P. Kennedy, the
late Ambassador of the United States to the Court of St. James's, living on
the date hereof and (ii) the Latest Possible Maturity Date. The right to
purchase all Mortgage Loans and REO Properties pursuant to clause (a) above
shall be conditioned upon the Pool Stated Principal Balance, at the time of
any such repurchase, aggregating less than ten percent of the Cut-off Date
Pool Principal Balance.
Section 9.02. Final Distribution on the Certificates.
If on any Determination Date, the Master Servicer determines that there
are no Outstanding Mortgage Loans and no other funds or assets in the Trust
Fund other than the funds in the Certificate Account, the Master Servicer
shall direct the Trustee promptly to send a final distribution notice to each
Certificateholder. If the Master Servicer elects to terminate the Trust Fund
pursuant to clause (a) of Section 9.01, at least 20 days prior to the date
notice is to be mailed to the affected Certificateholders the Master Servicer
shall notify the Depositor and the Trustee of the date the Master Servicer
intends to terminate the Trust Fund and of the applicable repurchase price of
the Mortgage Loans and REO Properties.
Notice of any termination of the Trust Fund, specifying the Distribution
Date on which Certificateholders may surrender their Certificates for payment
of the final distribution and cancellation, shall be given promptly by the
Trustee by letter to Certificateholders mailed not earlier than the 15th day
and not later than the 10th day of the month next preceding the month of such
final distribution. Any such notice shall specify (a) the Distribution Date
upon which final distribution on the Certificates will be made upon
presentation and surrender of Certificates at the office therein designated,
(b) the amount of such final distribution, (c) the location of the office or
agency at which such presentation and surrender must be made, and (d) that the
Record Date otherwise applicable to such Distribution Date is not applicable,
distributions being made only upon presentation and surrender of the
Certificates at the office therein specified. The Master Servicer will give
such notice to each Rating Agency at the time such notice is given to
Certificateholders.
Upon presentation and surrender of the Certificates, the Trustee shall
cause to be distributed to the Certificateholders of each Class, in each case
on the final Distribution Date and in the order set forth in Section 4.02, in
the case of the Certificateholders, in proportion to their respective
Percentage Interests, with respect to Certificateholders of the same Class, an
amount equal to (i) as to each Class of Regular Certificates, the Certificate
Balance thereof plus accrued interest thereon (or on their Notional Amount, if
applicable) and (ii) as to the Residual Certificates, the amount, if any,
which remains on deposit in the Distribution Account (other than the amounts
retained to meet claims) after application pursuant to clause (i) above.
In the event that any affected Certificateholders shall not surrender
Certificates for cancellation within six months after the date specified in
the above mentioned written notice, the Trustee shall give a second written
notice to the remaining Certificateholders to surrender their Certificates for
cancellation and receive the final distribution with respect thereto. If
within six months after the second notice all the applicable Certificates
shall not have been surrendered for cancellation, the Trustee may take
appropriate steps, or may appoint an agent to take appropriate steps, to
contact the remaining Certificateholders concerning surrender of their
Certificates, and the cost thereof shall be paid out of the funds and other
assets which remain a part of the Trust Fund. If within one year after the
second notice all Certificates shall not have been surrendered for
cancellation, the Class A-R Certificateholders shall be entitled to all
unclaimed funds and other assets of the Trust Fund which remain subject
hereto.
Section 9.03. Additional Termination Requirements.
(a) In the event the Master Servicer exercises its purchase option as
provided in Section 9.01, the Trust Fund shall be terminated in accordance
with the following additional requirements, unless the Trustee has been
supplied with an Opinion of Counsel, at the expense of the Master Servicer, to
the effect that the failure to comply with the requirements of this Section
9.03 will not (i) result in the imposition of taxes on "prohibited
transactions" on the REMIC as defined in Section 860F of the Code, or (ii)
cause the REMIC to fail to qualify as a REMIC at any time that any
Certificates are outstanding:
(1) Within 90 days prior to the final Distribution Date set forth in the
notice given by the Master Servicer under Section 9.02, the Master
Servicer shall prepare and the Trustee, at the expense of the "tax matters
person", shall adopt a plan of complete liquidation within the meaning of
Section 860F(a)(4) of the Code which, as evidenced by an Opinion of
Counsel (which opinion shall not be an expense of the Trustee, the Tax
Matters Person or the Trust Fund), meets the requirements of a qualified
liquidation; and
(2) Within 90 days after the time of adoption of such a plan of complete
liquidation, the Trustee shall sell all of the assets of the Trust Fund to
the Master Servicer for cash in accordance with Section 9.01.
(b) The Trustee as agent for the REMIC hereby agrees to adopt and sign
such a plan of complete liquidation upon the written request of the Master
Servicer, and the receipt of the Opinion of Counsel referred to in Section
9.03(a)(1) and to take such other action in connection therewith as may be
reasonably requested by the Master Servicer.
(c) By their acceptance of the Certificates, the Holders thereof hereby
authorize the Master Servicer to prepare and the Trustee to adopt and sign a
plan of complete liquidation.
<PAGE>
ARTICLE X
MISCELLANEOUS PROVISIONS
Section 10.01. Amendment.
This Agreement may be amended from time to time by the Depositor, the
Master Servicer and the Trustee without the consent of any of the
Certificateholders (i) to cure any ambiguity or mistake, (ii) to correct any
defective provision herein or to supplement any provision herein which may be
inconsistent with any other provision herein, (iii) to add to the duties of
the Depositor, the Seller or the Master Servicer, (iv) to add any other
provisions with respect to matters or questions arising hereunder or (v) to
modify, alter, amend, add to or rescind any of the terms or provisions
contained in this Agreement; provided that any action pursuant to clauses (iv)
or (v) above shall not, as evidenced by an Opinion of Counsel (which Opinion
of Counsel shall not be an expense of the Trustee or the Trust Fund),
adversely affect in any material respect the interests of any
Certificateholder; provided, however, that no such Opinion of Counsel shall be
required if the Person requesting the amendment obtains a letter from each
Rating Agency stating that the amendment would not result in the downgrading
or withdrawal of the respective ratings then assigned to the Certificates; it
being understood and agreed that any such letter in and of itself will not
represent a determination as to the materiality of any such amendment and will
represent a determination only as to the credit issues affecting any such
rating.
The Trustee, the Depositor and the Master Servicer also may at any time
and from time to time amend this Agreement without the consent of the
Certificateholders to modify, eliminate or add to any of its provisions to
such extent as shall be necessary or helpful to (i) maintain the qualification
of the Subsidiary REMICs and the Master REMIC under the Code, (ii) avoid or
minimize the risk of the imposition of any tax on the Subsidiary REMICs or the
Master REMIC pursuant to the Code that would be a claim at any time prior to
the final redemption of the Certificates or (iii) comply with any other
requirements of the Code, provided that the Trustee has been provided an
Opinion of Counsel, which opinion shall be an expense of the party requesting
such opinion but in any case shall not be an expense of the Trustee or the
Trust Fund, to the effect that such action is necessary or helpful to, as
applicable, (i) maintain such qualification, (ii) avoid or minimize the risk
of the imposition of such a tax or (iii) comply with any such requirements of
the Code.
This Agreement may also be amended from time to time by the Depositor,
the Master Servicer and the Trustee with the consent of the Holders of a
Majority in Interest of each Class of Certificates affected thereby for the
purpose of adding any provisions to or changing in any manner or eliminating
any of the provisions of this Agreement or of modifying in any manner the
rights of the Holders of Certificates; provided, however, that no such
amendment shall (i) reduce in any manner the amount of, or delay the timing
of, payments required to be distributed on any Certificate without the consent
of the Holder of such Certificate, (ii) adversely affect in any material
respect the interests of the Holders of any Class of Certificates in a manner
other than as described in (i), without the consent of the Holders of
Certificates of such Class evidencing, as to such Class, Percentage Interests
aggregating 66%, or (iii) reduce the aforesaid percentages of Certificates the
Holders of which are required to consent to any such amendment, without the
consent of the Holders of all such Certificates then outstanding.
Notwithstanding any contrary provision of this Agreement, the Trustee
shall not consent to any amendment to this Agreement unless it shall have
first received an Opinion of Counsel, which opinion shall not be an expense of
the Trustee or the Trust Fund, to the effect that such amendment will not
cause the imposition of any tax on any REMIC or the Certificateholders or
cause any REMIC to fail to qualify as a REMIC at any time that any
Certificates are outstanding.
Promptly after the execution of any amendment to this Agreement requiring
the consent of Certificateholders, the Trustee shall furnish written
notification of the substance or a copy of such amendment to each
Certificateholder and each Rating Agency.
It shall not be necessary for the consent of Certificateholders under
this Section 10.01 to approve the particular form of any proposed amendment,
but it shall be sufficient if such consent shall approve the substance
thereof. The manner of obtaining such consents and of evidencing the
authorization of the execution thereof by Certificateholders shall be subject
to such reasonable regulations as the Trustee may prescribe.
Nothing in this Agreement shall require the Trustee to enter into an
amendment without receiving an Opinion of Counsel (which Opinion shall not be
an expense of the Trustee or the Trust Fund), satisfactory to the Trustee that
(i) such amendment is permitted and is not prohibited by this Agreement and
that all requirements for amending this Agreement have been complied with; and
(ii) either (A) the amendment does not adversely affect in any material
respect the interests of any Certificateholder or (B) the conclusion set forth
in the immediately preceding clause (A) is not required to be reached pursuant
to this Section 10.01.
Section 10.02. Recordation of Agreement; Counterparts.
This Agreement is subject to recordation in all appropriate public
offices for real property records in all the counties or other comparable
jurisdictions in which any or all of the properties subject to the Mortgages
are situated, and in any other appropriate public recording office or
elsewhere, such recordation to be effected by the Master Servicer at its
expense, but only upon direction by the Trustee accompanied by an Opinion of
Counsel to the effect that such recordation materially and beneficially
affects the interests of the Certificateholders.
For the purpose of facilitating the recordation of this Agreement as
herein provided and for other purposes, this Agreement may be executed
simultaneously in any number of counterparts, each of which counterparts shall
be deemed to be an original, and such counterparts shall constitute but one
and the same instrument.
Section 10.03. Governing Law.
THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE
SUBSTANTIVE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO
BE PERFORMED IN THE STATE OF NEW YORK AND THE OBLIGATIONS, RIGHTS AND REMEDIES
OF THE PARTIES HERETO AND THE CERTIFICATEHOLDERS SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS.
Section 10.04. Intention of Parties.
It is the express intent of the parties hereto that the conveyance (i) of
the Mortgage Loans by the Seller to the Depositor and (ii) of the Trust Fund
by the Depositor to the Trustee each be, and be construed as, an absolute sale
thereof. It is, further, not the intention of the parties that such
conveyances be deemed a pledge thereof. However, in the event that,
notwithstanding the intent of the parties, such assets are held to be the
property of the Seller or Depositor, as the case may be, or if for any other
reason this Agreement is held or deemed to create a security interest in
either such assets, then (i) this Agreement shall be deemed to be a security
agreement within the meaning of the Uniform Commercial Code of the State of
New York and (ii) the conveyances provided for in this Agreement shall be
deemed to be an assignment and a grant (i) by the Seller to the Depositor or
(ii) by the Depositor to the Trustee, for the benefit of the
Certificateholders, of a security interest in all of the assets transferred,
whether now owned or hereafter acquired.
The Seller and the Depositor for the benefit of the Certificateholders
shall, to the extent consistent with this Agreement, take such actions as may
be necessary to ensure that, if this Agreement were deemed to create a
security interest in the Trust Fund, such security interest would be deemed to
be a perfected security interest of first priority under applicable law and
will be maintained as such throughout the term of the Agreement. The Depositor
shall arrange for filing any Uniform Commercial Code continuation statements
in connection with any security interest granted or assigned to the Trustee
for the benefit of the Certificateholders.
Section 10.05. Notices.
(a) The Trustee shall use its best efforts to promptly provide notice to
each Rating Agency with respect to each of the following of which it has
actual knowledge:
1. Any material change or amendment to this Agreement;
2. The occurrence of any Event of Default that has not been cured;
3. The resignation or termination of the Master Servicer or the
Trustee and the appointment of any successor;
4. The repurchase or substitution of Mortgage Loans pursuant to
Section 2.03; and
5. The final payment to Certificateholders.
In addition, the Trustee shall promptly furnish to each Rating
Agency copies of the following:
1. Each report to Certificateholders described in Section 4.03;
2. Each annual statement as to compliance described in Section
3.16;
3. Each annual independent public accountants' servicing report
described in Section 3.17; and
4. Any notice of a purchase of a Mortgage Loan pursuant to
Section 2.02, 2.03 or 3.11.
(b) All directions, demands and notices hereunder shall be in writing and
shall be deemed to have been duly given when delivered to (a) in the case of
the Depositor, CWMBS, Inc., 155 North Lake Avenue, Pasadena, California 91101,
Attention: David A. Spector, (b) in the case of the Master Servicer, IndyMac,
Inc., 155 North Lake Avenue, Pasadena, California 91101, Attention: Secondary
Marketing or such other address as may be hereafter furnished to the Depositor
and the Trustee by the Master Servicer in writing, (c) in the case of the
Trustee, The Bank of New York, 101 Barclay Street, 12E, New York, New York
10286, Attention: Mortgage-Backed Securities Group Series 1999-D, or such
other address as the Trustee may hereafter furnish to the Depositor or Master
Servicer, and (d) in the case of each of the Rating Agencies, the address
specified therefor in the definition corresponding to the name of such Rating
Agency. Notices to Certificateholders shall be deemed given when mailed, first
class postage prepaid, to their respective addresses appearing in the
Certificate Register.
Section 10.06. Severability of Provisions.
If any one or more of the covenants, agreements, provisions or terms of
this Agreement shall be for any reason whatsoever held invalid, then such
covenants, agreements, provisions or terms shall be deemed severable from the
remaining covenants, agreements, provisions or terms of this Agreement and
shall in no way affect the validity or enforceability of the other provisions
of this Agreement or of the Certificates or the rights of the Holders thereof.
Section 10.07. Assignment.
Notwithstanding anything to the contrary contained herein, except as
provided in Section 6.02, this Agreement may not be assigned by the Master
Servicer without the prior written consent of the Trustee and Depositor.
Section 10.08. Limitation on Rights of Certificateholders.
The death or incapacity of any Certificateholder shall not operate to
terminate this Agreement or the trust created hereby, nor entitle such
Certificateholder's legal representative or heirs to claim an accounting or to
take any action or commence any proceeding in any court for a petition or
winding up of the trust created hereby, or otherwise affect the rights,
obligations and liabilities of the parties hereto or any of them.
No Certificateholder shall have any right to vote (except as provided
herein) or in any manner otherwise control the operation and management of the
Trust Fund, or the obligations of the parties hereto, nor shall anything
herein set forth or contained in the terms of the Certificates be construed so
as to constitute the Certificateholders from time to time as partners or
members of an association; nor shall any Certificateholder be under any
liability to any third party by reason of any action taken by the parties to
this Agreement pursuant to any provision hereof.
No Certificateholder shall have any right by virtue or by availing itself
of any provisions of this Agreement to institute any suit, action or
proceeding in equity or at law upon or under or with respect to this
Agreement, unless such Holder previously shall have given to the Trustee a
written notice of an Event of Default and of the continuance thereof, as
herein provided, and unless the Holders of Certificates evidencing not less
than 25% of the Voting Rights evidenced by the Certificates shall also have
made written request to the Trustee to institute such action, suit or
proceeding in its own name as Trustee hereunder and shall have offered to the
Trustee such reasonable indemnity as it may require against the costs,
expenses, and liabilities to be incurred therein or thereby, and the Trustee,
for 60 days after its receipt of such notice, request and offer of indemnity
shall have neglected or refused to institute any such action, suit or
proceeding; it being understood and intended, and being expressly covenanted
by each Certificateholder with every other Certificateholder and the Trustee,
that no one or more Holders of Certificates shall have any right in any manner
whatever by virtue or by availing itself or themselves of any provisions of
this Agreement to affect, disturb or prejudice the rights of the Holders of
any other of the Certificates, or to obtain or seek to obtain priority over or
preference to any other such Holder or to enforce any right under this
Agreement, except in the manner herein provided and for the common benefit of
all Certificateholders. For the protection and enforcement of the provisions
of this Section 10.08, each and every Certificateholder and the Trustee shall
be entitled to such relief as can be given either at law or in equity.
Section 10.09. Inspection and Audit Rights.
The Master Servicer agrees that, on reasonable prior notice, it will
permit and will cause each Subservicer to permit any representative of the
Depositor or the Trustee during the Master Servicer's normal business hours,
to examine all the books of account, records, reports and other papers of the
Master Servicer relating to the Mortgage Loans, to make copies and extracts
therefrom, to cause such books to be audited by independent certified public
accountants selected by the Depositor or the Trustee and to discuss its
affairs, finances and accounts relating to the Mortgage Loans with its
officers, employees and independent public accountants (and by this provision
the Master Servicer hereby authorizes said accountants to discuss with such
representative such affairs, finances and accounts), all at such reasonable
times and as often as may be reasonably requested. Any out-of-pocket expense
incident to the exercise by the Depositor or the Trustee of any right under
this Section 10.09 shall be borne by the party requesting such inspection; all
other such expenses shall be borne by the Master Servicer or the related
Subservicer.
Section 10.10. Certificates Nonassessable and Fully Paid.
It is the intention of the Depositor that Certificateholders shall not be
personally liable for obligations of the Trust Fund, that the interests in the
Trust Fund represented by the Certificates shall be nonassessable for any
reason whatsoever, and that the Certificates, upon due authentication thereof
by the Trustee pursuant to this Agreement, are and shall be deemed fully paid.
* * * * * *
<PAGE>
IN WITNESS WHEREOF, the Depositor, the Trustee, the Seller and the Master
Servicer have caused their names to be signed hereto by their respective
officers thereunto duly authorized as of the day and year first above written.
CWMBS, INC.,
as Depositor
By: /s/ Celia Coulter
--------------------
Name: Celia Coulter
Title: Vice President
THE BANK OF NEW YORK,
as Trustee
By: /s/ Kelly A. Sheahan
--------------------
Name: Kelly A. Sheahan
Title: Assistant Vice President
INDYMAC, INC.,
as Seller and Master Servicer
By: /s/ John Kim
--------------------
Name: John Kim
Title: Vice President
<PAGE>
SCHEDULE I
Mortgage Loan Schedule
[Delivered at Closing to Trustee]
<PAGE>
SCHEDULE II
CWMBS, Inc.
Mortgage Pass-Through Certificates
Series 1999-D
Representations and Warranties of the Seller/Master Servicer
IndyMac, Inc. ("IndyMac") hereby makes the representations and warranties
set forth in this Schedule II to the Depositor and the Trustee, as of the
Closing Date, or if so specified herein, as of the Cut-off Date. Capitalized
terms used but not otherwise defined in this Schedule II shall have the
meanings ascribed thereto in the Pooling and Servicing Agreement (the "Pooling
and Servicing Agreement") relating to the above-referenced Series, among
IndyMac, as seller and master servicer, CWMBS, Inc., as depositor, and The
Bank of New York, as trustee.
(1) IndyMac is duly organized as a Delaware
corporation and is validly existing and in good standing under the
laws of the State of Delaware and is duly authorized and qualified to
transact any and all business contemplated by the Pooling and
Servicing Agreement to be conducted by IndyMac in any state in which
a Mortgaged Property is located or is otherwise not required under
applicable law to effect such qualification and, in any event, is in
compliance with the doing business laws of any such state, to the
extent necessary to ensure its ability to enforce each Mortgage Loan,
to service the Mortgage Loans in accordance with the terms of the
Pooling and Servicing Agreement and to perform any of its other
obligations under the Pooling and Servicing Agreement in accordance
with the terms thereof.
(2) IndyMac has the full corporate power and
authority to sell and service each Mortgage Loan, and to execute,
deliver and perform, and to enter into and consummate the
transactions contemplated by the Pooling and Servicing Agreement and
has duly authorized by all necessary corporate action on the part of
IndyMac the execution, delivery and performance of the Pooling and
Servicing Agreement; and the Pooling and Servicing Agreement,
assuming the due authorization, execution and delivery thereof by the
other parties thereto, constitutes a legal, valid and binding
obligation of IndyMac, enforceable against IndyMac in accordance with
its terms, except that (a) the enforceability thereof may be limited
by bankruptcy, insolvency, moratorium, receivership and other similar
laws relating to creditors' rights generally and (b) the remedy of
specific performance and injunctive and other forms of equitable
relief may be subject to equitable defenses and to the discretion of
the court before which any proceeding therefor may be brought.
(3) The execution and delivery of the Pooling and
Servicing Agreement by IndyMac, the sale and servicing of the
Mortgage Loans by IndyMac under the Pooling and Servicing Agreement,
the consummation of any other of the transactions contemplated by the
Pooling and Servicing Agreement, and the fulfillment of or compliance
with the terms thereof are in the ordinary course of business of
IndyMac and will not (A) result in a material breach of any term or
provision of the charter or by-laws of IndyMac or (B) materially
conflict with, result in a material breach, violation or acceleration
of, or result in a material default under, the terms of any other
material agreement or instrument to which IndyMac is a party or by
which it may be bound, or (C) constitute a material violation of any
statute, order or regulation applicable to IndyMac of any court,
regulatory body, administrative agency or governmental body having
jurisdiction over IndyMac; and IndyMac is not in breach or violation
of any material indenture or other material agreement or instrument,
or in violation of any statute, order or regulation of any court,
regulatory body, administrative agency or governmental body having
jurisdiction over it which breach or violation may materially impair
IndyMac's ability to perform or meet any of its obligations under the
Pooling and Servicing Agreement.
(4) No litigation is pending or, to the best of
IndyMac's knowledge, threatened against IndyMac that would prohibit
the execution or delivery of, or performance under, the Pooling and
Servicing Agreement by IndyMac.
<PAGE>
SCHEDULE III
CWMBS, Inc.
Mortgage Pass-Through Certificates
Series 1999-D
Representations and Warranties as to the Mortgage Loans
IndyMac, Inc. ("IndyMac") hereby makes the representations and warranties
set forth in this Schedule III to the Depositor and the Trustee, as of the
Closing Date, or if so specified herein, as of the Cut-off Date or date of
origination of the Mortgage Loan. Capitalized terms used but not otherwise
defined in this Schedule III shall have the meanings ascribed thereto in the
Pooling and Servicing Agreement (the "Pooling and Servicing Agreement")
relating to the above-referenced Series, among IndyMac, as seller and master
servicer, CWMBS, Inc., as depositor, and The Bank of New York, as trustee.
(1) The information set forth on Schedule I to the
Pooling and Servicing Agreement with respect to each Mortgage Loan is
true and correct in all material respects as of the Closing Date.
(2) As of the Closing Date, all regularly scheduled
monthly payments due with respect to each Mortgage Loan up to and
including the Due Date immediately prior to the Cut-off Date have
been made; and as of the Cut-off Date, no Mortgage Loan had a
regularly scheduled monthly payment that was 60 or more days
Delinquent during the twelve months prior to the Cut-off Date.
(3) With respect to any Mortgage Loan that is not a
Cooperative Loan, each Mortgage is a valid and enforceable first lien
on the Mortgaged Property subject only to (a) the lien of
nondelinquent current real property taxes and assessments and liens
or interests arising under or as a result of any federal, state or
local law, regulation or ordinance relating to hazardous wastes or
hazardous substances and, if the related Mortgaged Property is a unit
in a condominium project or planned unit development, any lien for
common charges permitted by statute or homeowner association fees,
(b) covenants, conditions and restrictions, rights of way, easements
and other matters of public record as of the date of recording of
such Mortgage, such exceptions appearing of record being generally
acceptable to mortgage lending institutions in the area wherein the
related Mortgaged Property is located or specifically reflected in
the appraisal made in connection with the origination of the related
Mortgage Loan, and (c) other matters to which like properties are
commonly subject which do not materially interfere with the benefits
of the security intended to be provided by such Mortgage.
(4) Immediately prior to the assignment of the
Mortgage Loans to the Depositor, the Seller had good title to, and
was the sole owner of, each Mortgage Loan free and clear of any
pledge, lien, encumbrance or security interest and had full right and
authority, subject to no interest or participation of, or agreement
with, any other party, to sell and assign the same pursuant to the
Pooling and Servicing Agreement.
(5) As of the date of origination of each Mortgage
Loan, there was no delinquent tax or assessment lien against the
related Mortgaged Property.
(6) There is no valid offset, defense or
counterclaim to any Mortgage Note or Mortgage, including the
obligation of the Mortgagor to pay the unpaid principal of or
interest on such Mortgage Note.
(7) There are no mechanics' liens or claims for
work, labor or material affecting any Mortgaged Property which are or
may be a lien prior to, or equal with, the lien of such Mortgage,
except those which are insured against by the title insurance policy
referred to in item (11) below.
(8) To the best of the Seller's knowledge, no
Mortgaged Property has been materially damaged by water, fire,
earthquake, windstorm, flood, tornado or similar casualty (excluding
casualty from the presence of hazardous wastes or hazardous
substances, as to which the Seller makes no representation) so as to
affect adversely the value of the related Mortgaged Property as
security for such Mortgage Loan.
(9) Each Mortgage Loan at origination complied in
all material respects with applicable state and federal laws,
including, without limitation, usury, equal credit opportunity, real
estate settlement procedures, truth-in-lending and disclosure laws or
any noncompliance does not have a material adverse effect on the
value of the related Mortgage Loan.
(10) As of the Closing Date, the Seller has not
modified the Mortgage in any material respect (except that a Mortgage
Loan may have been modified by a written instrument which has been
recorded or submitted for recordation, if necessary, to protect the
interests of the Certificateholders and which has been delivered to
the Trustee); satisfied, cancelled or subordinated such Mortgage in
whole or in part; released the related Mortgaged Property in whole or
in part from the lien of such Mortgage; or executed any instrument of
release, cancellation, modification or satisfaction with respect
thereto.
(11) A lender's policy of title insurance together
with a condominium endorsement and extended coverage endorsement, if
applicable, in an amount at least equal to the Cut-off Date Stated
Principal Balance of each such Mortgage Loan or a commitment (binder)
to issue the same was effective on the date of the origination of
each Mortgage Loan, each such policy is valid and remains in full
force and effect.
(12) Each Mortgage Loan was originated (within the
meaning of Section 3(a)(41) of the Securities Exchange Act of 1934,
as amended) by an entity that satisfied at the time of origination
the requirements of Section 3(a)(41) of the Securities Exchange Act
of 1934, as amended.
(13) To the best of the Seller's knowledge, all of
the improvements which were included for the purpose of determining
the Appraised Value of the Mortgaged Property lie wholly within the
boundaries and building restriction lines of such property, and no
improvements on adjoining properties encroach upon the Mortgaged
Property, unless such failure to be wholly within such boundaries and
restriction lines or such encroachment, as the case may be, does not
have a material effect on the value of such Mortgaged Property.
(14) To the best of the Seller's knowledge, as of
the date of origination of each Mortgage Loan, no improvement located
on or being part of the Mortgaged Property is in violation of any
applicable zoning law or regulation unless such violation would not
have a material adverse effect on the value of the related Mortgaged
Property. To the best of the Seller's knowledge, all inspections,
licenses and certificates required to be made or issued with respect
to all occupied portions of the Mortgaged Property and, with respect
to the use and occupancy of the same, including but not limited to
certificates of occupancy and fire underwriting certificates, have
been made or obtained from the appropriate authorities, unless the
lack thereof would not have a material adverse effect on the value of
such Mortgaged Property.
(15) The Mortgage Note and the related Mortgage are
genuine, and each is the legal, valid and binding obligation of the
maker thereof, enforceable in accordance with its terms and under
applicable law.
(16) The proceeds of the Mortgage Loan have been
fully disbursed and there is no requirement for future advances
thereunder.
(17) The related Mortgage contains customary and
enforceable provisions which render the rights and remedies of the
holder thereof adequate for the realization against the Mortgaged
Property of the benefits of the security, including, (i) in the case
of a Mortgage designated as a deed of trust, by trustee's sale, and
(ii) otherwise by judicial foreclosure.
(18) With respect to each Mortgage constituting a
deed of trust, a trustee, duly qualified under applicable law to
serve as such, has been properly designated and currently so serves
and is named in such Mortgage, and no fees or expenses are or will
become payable by the Certificateholders to the trustee under the
deed of trust, except in connection with a trustee's sale after
default by the Mortgagor.
(19) At the Cut-off Date, the improvements upon
each Mortgaged Property are covered by a valid and existing hazard
insurance policy with a generally acceptable carrier that provides
for fire and extended coverage and coverage for such other hazards as
are customarily required by institutional single family mortgage
lenders in the area where the Mortgaged Property is located, and the
Seller has received no notice that any premiums due and payable
thereon have not been paid; the Mortgage obligates the Mortgagor
thereunder to maintain all such insurance including flood insurance
at the Mortgagor's cost and expense. Anything to the contrary in this
item (19) notwithstanding, no breach of this item (19) shall be
deemed to give rise to any obligation of the Seller to repurchase or
substitute for such affected Mortgage Loan or Loans so long as the
Master Servicer maintains a blanket policy pursuant to the second
paragraph of Section 3.12(a) of the Pooling and Servicing Agreement.
(20) If at the time of origination of each Mortgage
Loan, related the Mortgaged Property was in an area then identified
in the Federal Register by the Federal Emergency Management Agency as
having special flood hazards, a flood insurance policy in a form
meeting the then-current requirements of the Flood Insurance
Administration is in effect with respect to such Mortgaged Property
with a generally acceptable carrier.
(21) To the best of the Seller's knowledge, there
is no proceeding pending or threatened for the total or partial
condemnation of any Mortgaged Property, nor is such a proceeding
currently occurring.
(22) To best of the Seller's knowledge, there is no
material event which, with the passage of time or with notice and the
expiration of any grace or cure period, would constitute a material
non-monetary default, breach, violation or event of acceleration
under the Mortgage or the related Mortgage Note; and the Seller has
not waived any material non-monetary default, breach, violation or
event of acceleration.
(23) Each Mortgage File contains an appraisal of
the related Mortgaged Property in a form acceptable to FNMA or FHLMC.
(24) Any leasehold estate securing a Mortgage
Loan has a stated term at least as long as the term of the related
Mortgage Loan.
(25) Each Mortgage Loan was selected from among the
outstanding fixed-rate one- to four-family mortgage loans in the
Seller's portfolio at the Closing Date as to which the
representations and warranties made with respect to the Mortgage
Loans set forth in this Schedule III can be made. No such selection
was made in a manner intended to adversely affect the interests of
the Certificateholders.
(26) No more than 0.42% of the Mortgage Loans
(by aggregate Stated Principal Balance of the Mortgage Loans) are
Cooperative Loans.
(27) Each Cooperative Loan is secured by a valid,
subsisting and enforceable perfected first lien and security interest
in the related Mortgaged Property, subject only to (i) the rights of
the Cooperative Corporation to collect Maintenance and assessments
from the Mortgagor, (ii) the lien of the Blanket Mortgage, if any, on
the Cooperative Property and of real property taxes, water and sewer
charges, rents and assessments on the Cooperative Property not yet
due and payable, and (iii) other matters to which like Cooperative
Units are commonly subject which do not materially interfere with the
benefits of the security intended to be provided by the Security
Agreement or the use, enjoyment, value or marketability of the
Cooperative Unit. Each original UCC financing statement, continuation
statement or other governmental filing or recordation necessary to
create or preserve the perfection and priority of the first priority
lien and security interest in the Cooperative Shares and Proprietary
Lease has been timely and properly made. Any security agreement,
chattel mortgage or equivalent document related to the Cooperative
Loan and delivered to the Sponsor or its designee establishes in the
Seller a valid and subsisting perfected first lien on and security
interest in the property described therein, and the Seller has full
right to sell and assign the same.
(28) Each Cooperative Corporation qualifies as a
"cooperative housing corporation" as defined in Section 216 of the Code
